MySale surges in UK, Australia, buy now, pay later drives growth
MySale Group has reported record sales and profitability for the half-year to December 31 with recent investment in its buy now, pay later option (called Ourpay) and its other tech updates helping to drive it forward.
The international flash sales e-tailer owns a variety of sites, including Britain’s Cocosa, and sells in Australia, New Zealand, South-East Asia and the UK. It saw revenues of A$151.9 million, up 11% in the period, as gross profit surged 19% to A$45.6 million. The gross margin rose to 30.1% from 28.1% and underlying pre-tax profit was up 266% to A$2.3 million.
But the company isn’t yet banking the cash with its reported pre-tax loss sitting at A$0.1 million on the back of one-off costs. That’s less than the A$1.3 million loss of a year ago but still keeps it in negative territory… for now, at least.
MySale is clearly heading towards profitability but it didn’t give numerical forecasts on Monday along with its results, although it stressed that its strong momentum is continuing and that annual profit would be near the upper end of expectations.
And it had plenty of other good news. It said mobile activity continues to grow and represented 60% of orders in the half, while cumulative app downloads have reached 7.5 million. Its active customer base rose 12% to one million and it has continued its focus on activating customers with a higher lifetime value.
But despite the progress, the average order value has only been “stable” (ie flat if you want to put a negative spin on it) at A$87. Yet at least its product returns rate remains at an “industry-leading level" of just 5%.
NEW TECH, NEW SOLUTIONS
The company focused heavily on how tech has helped boost its operations in the first half. That included increased marketing automation, but it looks like the buy now, pay later introduction was the most significant factor. And it has been followed up with the launch of Ourpay Select, a subscription delivery service, further enhancing the customer proposition.
The Ourpay system was developed in-house after the company found that other deferred payment offers were proving successful for rivals but couldn’t be adapted to MySale’s business. It’s “producing material uplifts in our conversion rate and basket size,” and the firm is now planning “to grow [Ourpay’s] penetration within our own business and also potentially to operate [it] as a solution to third party retailers.”
And that latter development is significant because “for a relatively small capital outlay, we have created a business of substantial value to MySale shareholders.”
PARTNERSHIPS & REGIONS
On Monday, the company also said that its merchandising and planning updates are now delivering sales, margin and operational benefits. And its partnerships are also delivering good results.
The firm has established strategic partnerships with retailers including Hudson’s Bay’s gilt.com and Sports Direct. These strategic partnerships “have already provided significant additional product choice to customers across all international territories and average online SKU availability now exceeds 700,000,” it said. “We continue to pursue additional strategic partnerships that will add further value.”
During the first half in its different regions, MySale said it saw across-the-board revenue increases, although those rises varied widely. Revenue was up 12% in Australia and New Zealand to A$125.8 million, 1% in South-East Asia to A$17.5 million and 24% in the UK/rest of world to A$8.6 million. And in the UK/RoW, gross profit increased by over 90% to A$2.1 million “as this operation achieved the step change in gross margin anticipated by its strategic plan.”
The company also said that it has a material presence in the UK “as it is an important centre for the group's product sourcing team for both UK and European labels. Brands from these territories, along with those from the USA, have grown their weighting within group revenues over the past few years and now account for over half of MySale's worldwide revenue.”
For the future, it said “there is much more for us to do and we have much bigger ambitions for the business, but at this stage our plans are very much on track. The acquisitions we have completed in the last two years (most recently Identity Direct) demonstrate that strategic M&A can add real value to the group and that we have a solid platform upon which we can bolt new business offerings. We continue to view this as a key part of our growth strategy going forward and the economics are compelling.”
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