Mysale Group (MYSL)

 

LSE:MYSL: Half Yearly Report

Mysale Group

01 Mar 2016 07:00:08

MySale Group PLC

RNS Number : 5451Q
MySale Group PLC
01 March 2016
 

Interim Results

 

MySale Group plc (AIM: MYSL) (the 'company' or the 'group') is pleased to announce its Interim Results for the six months ended 31 December 2015.

 

H1 Financial Highlights

·      A positive first half with underlying EBITDA of A$1.5 million; a A$12.9 million improvement on the prior year

·      Good revenue momentum; overall growth of 4% at an accelerating rate through the period

·      Strong gross profit growth of 15% driven by 250bp margin improvement

·      Performance building well in South-East Asia with 8% revenue growth and gross profit increased 187%

·      Group overheads now at materially lower level of 24% of revenue (2014: 28%)

·      Strong balance sheet with cash balance of A$30 million and an underlying cash position of A$52.2 million, representing c 17 pence per share

·      This position follows an investment in H1 of A$17.2 million, representing c 6 pence per share, into additional inventory levels to support margin improvement

·      Good trading momentum has continued into the second half with 20% revenue growth in the first six weeks

 

H1 Operational Highlights

·      Focus on improving gross margins and activating customers with higher lifetime-value

·      Average order value increased 17% to A$84 (2014: A$72)

·      Average revenue per active member increased 6% to A$293 (2014: A$278)

·      Further growth in mobile which now represents 59% of orders (2014: 55%) with over 5.5 million mobile apps now downloaded

·      Active members reduced, as planned, by 10% in H1 to 731,000 as growth in gross margin was prioritised and unprofitable postage promotions from a year earlier curtailed

·      Active member numbers have returned to growth in H2

·      Increase in own-buy inventory in-line with strategic plan to grow gross margin

·      Returns rate remains steady at c 5-6%

·      Technology improvements; enhanced search functionality across the platform to drive customer engagement; and more efficient logistics to reduce unit costs

·      Acquisition of Australian online retail business completed after the period end

 

Carl Jackson, Chief Executive Officer, commented

 

''The group had a good start to FY2016 as the planned strategic initiatives have delivered both improved financial performance and positioned the group for further, profitable, growth.

Our focus for the first half of the financial year was to restore the business to profitability and to re-focus around our simplified strategy. This was successfully achieved and we were also able to grow our revenues once again.

 

Gross margin has increased in all regions and whilst currency headwind has constrained this growth in our core ANZ market, our focus on providing exceptional value and a wider range of product for our customers is proving effective. Our recently announced bolt-on acquisition in Australia provides a cost effective way of growing our active customer base and widening our proposition.

 

Further afield, the hard work undertaken in South-East Asia to localise our offer has delivered great results and means traction is beginning to build in these exciting markets.

 

We are pleased with the start to the second half of the year as we have seen good momentum in revenue growth. There is still a lot of hard work ahead, but we have a well invested technology, marketing, buying and distribution platform capable of supporting a much bigger business, so we look to the future with confidence. ''

 

 

MySale Group Plc

 

 

Business review

 

 

31 December 2015

 

 

 

Strategy

The group's planned strategic initiatives have delivered improved financial performance in the first half and positioned the group for further, profitable, growth in the second half and beyond. To maintain the momentum in performance the group is focused on the following key strategic aims:

1. Drive increased activity levels with our existing customers

2. Grow our active customer base

3. Improve our gross margins

 

The tactics that have or will be adopted to achieve these strategic aims include:

1.   Deploy proven digital marketing and engagement tactics - acquire loyal customers and frequent customers

·      The group has established and proven marketing capability that is almost exclusively dedicated to digital channels.

·      This digital acquisition of customers provides measurable returns on the initial marketing investment and the targeting of those prospective customers with most propensity to become repeat buyers and generate attractive returns.

·      Use of social media channels with both prospective and existing customers to maintain reach and relevance and build engagement.

 

2.   Use technology to improve conversion, engagement and each customer's journey - drive conversion, and activity

·      The group has focused on development of mobile commerce and data capabilities to provide improved customer experiences and thus improve frequency and volume of purchases.

·      The customer's mobile commerce experience has been at the heart of the group's strategy for many years and generates the majority of orders. Our mobile technology roadmap includes live personalisation, trending recommendations, intelligent notifications, enhanced images, wish lists, credit card capture and an Apple Watch App.

·      The group now has a dedicated team of data scientists focused on utilising live data streams and statistical models to drive business KPI's, identify business insights and deliver personalisation and trending recommendations. The group's capture and analysis of data allows for delivery of increasingly personalised shopping experiences to customers which improves engagement.

 

3.   Focus on geographies with better growth prospects - drive active customer base

·      Expansion into territories where the group can achieve higher long-term growth rates, such as South-East Asia and United Kingdom has been successfully achieved and is a key element of future growth and diversification from the home ANZ market.

·      The deployment of a localisation plan including; merchandising, pricing payment and delivery brings local relevance to our internationally sourced product range.

·      S-E Asia offers a large addressable population, increasing disposable income, lack of off-price competition and high mobile penetration. This region is well served by the group's strong value, branded sales offer and exceptional mobile commerce capability.

·      As the UK has a large and well developed online marketplace where engaged and active consumers can be acquired successfully and, given there is no online flash sale operator of scale, the group has targeted becoming a leading operator in the country.

·      Expanding the active user base further will allow economies of scale to be achieved

 

4.    Utilise our international sourcing capability - drive frequency and volumes

·      Access to European and USA brands means the group is able to offer great product selection to consumers in ANZ and S-E Asia which in turn helps drive customer engagement and frequency.

 

5.   Owning more stock - drive activity and gross margin

·      Whilst the majority of our activity shall be conducted on a consignment inventory basis we are selectively increasing the proportion of inventory that we own as this gives the group access to a wider range of products, improving customer engagement, and enhances gross profit margins.

·      Strengthens relationships with brands which in turn can lead to exclusive supply arrangements.

 

6.   Adding new categories and more products - drives activity and gross margin

·      Development of new categories and channels, both organically and by acquisition, will expand range of merchandise available to customers and enhance engagement and frequency of purchase.

·      New categories and expanded product ranges will be undertaken predominantly on a consignment, drop-ship or third party supplier basis so that group has an efficient working capital structure.

 

7.   Selective bolt-on M&A - drives active customer base and expands range of merchandise

·      The group has a robust, scalable international ecommerce platform which allows for the swift and cost effective expansion by way of bolt-on acquisitions.

·      As illustrated by the recent acquisition of Australian online business this can provide a step change in active customer numbers and immediate access to significant numbers of new suppliers and products.

·      M&A activity is and shall be focused on existing and complementary product categories and particularly those in which the group has experience of high-margin and strong repeat purchase metrics.

·      Such activity is targeted within existing territories where the group can leverage existing assets and infrastructure and de-risk the integration, as illustrated by the acquisition of Cocosa in the United Kingdom.

·      The group's core flash sales heritage has built expertise in a range of categories and products and as such the group's flexible logistics infrastructure will support a wide variety of product categories.

 

*Definitions

EBITDA: earnings before interest, tax, depreciation and amortisation

Underlying EBITDA: EBITDA before non-recurring and non-cash items (see note 5. to the financial statements)

Underlying cash balance: is the cash balance and trade and other receivables balance at the period end

Active Member: a member who has ordered in last twelve months

Average Order Value: product sales divided by number of orders

Revenue per Active Member: average total product spend, per active member, in last 12 months

ANZ: Australia and New Zealand   

South-East Asia: Hong Kong, Malaysia, Singapore, Philippines and Thailand

ROW: United Kingdom

 

Enquiries:

 

MySale Group plc

Carl Jackson, Chief Executive

 

tel: +61 (0) 414 817 843

tel: +44 (0) 7895 161 153

 

Graeme Burns, Corporate Development Director

 

tel: +44 (0) 777 585 4516

Zeus Capital Limited

Nick How, Corporate Finance

 

tel: +44 (0) 20 3829 5000

Maitland

Dan Yea

tel: +44 (0) 207 379 5151

 

 

About MySale Group

 

MySale is a leading international online retailer with established sales websites in Australia and New Zealand (ANZ), South-East Asia (SEA) and the United Kingdom, with over one million customers. Founded in 2007, the group provides members with access to outstanding products at exceptional value whilst providing a unique route for brand partners to manage excess inventory from the Southern Hemisphere.

 

The websites host both membership based, time limited, flash sales and open retail sales in each of its three territories across many product categories including fashion, ladieswear, menswear, childrenswear, health, beauty and homewares.

 

The group's online sales are supported by an international network of supply chain infrastructure and technology that enables MySale to source products from around the world for sale and delivery to members.

 

As a result of this exceptional inventory management solution, MySale has built a unique international brand portfolio and sourcing capability and is able to source product from over 3,500 brand partners.

 

 

Business Review

MySale Group Plc ('group') has made good progress in the first half of the current financial year; the planned strategic initiatives have delivered improved financial performance and positioned the group for further, profitable, growth.

 

In the six months to 31 December 2015 the group's revenue rose 4% to A$128.2 million and gross profit increased 15% to A$32.7 million following a 250bp improvement in gross margin, to 25.5% (2014: 23%).

 

 

6 m to 31.12.15

growth vs 2015

6 m to 31.12.14

A$ 000's

Revenue

Gross Profit

Revenue

Gross Profit

Revenue

Gross Profit

Group

     128,230

       32,727

+4%

+15%

        123,261

           28,350

ANZ

     109,482

       27,907

+3%

+5%

        106,802

           26,595

S-E Asia

       15,457

         3,852

+8%

+187%

           14,339

             1,340

ROW

         3,291

            968

+55%

+133%

             2,120

                415

 

The rate of revenue and gross profit growth progressively strengthened during the first half and it is anticipated this will continue into the second half of the financial year driven by the group's clear strategy to provide exceptional value and choice to our customers and supported by the group's proven digital marketing channels, efficient international operations and flexible technology platform.

 

The improved trading performance combined with the previously reduced overhead base saw the group generate positive underlying EBITDA of A$1.5 million for the period, in line with expectations and, in contrast to the significant losses (-A$11.4 million) incurred in the first half of last year.

 

During the first half the group continued the strategic plan to prioritise growth of gross margins and secure higher lifetime-value customers in all territories and, unlike a year earlier, the use of aggressive, yet ultimately unprofitable, postage promotions to drive activity was curtailed.

 

This strategy has translated into improved financial performance, from fewer active members, as gross profit margin increased 15% driven by a 250bp increase in gross margin, to 25.5%. Importantly the plan has delivered increases in both average order values and average annual spend per active member to A$84 (+17%) and A$293 (+6%) respectively.

 

The planned reduction in active customers, by 10% to 731,000, over the first half of the financial year came from the decision not to repeat the postage promotions from a year earlier. Looking forward, we have now passed the anniversary of the implementation of this trading strategy and growth in active customer numbers has resumed.

 

All territories have increased revenue and gross profit however it is in South-East Asia that the group has seen the most notable rate of growth as gross profit and gross margin percentage increased by more than 100%.

 

The refocus on the core business instigated in early 2015 is also delivering good results in the United Kingdom, where the group trades under the Cocosa brand, and following refinement to the operations here, the first signs of encouraging growth and performance are evident.

 

Australia & New Zealand

Within this operating territory the group has successfully implemented its strategic initiatives and improved gross profit, by 5% to A$27.9 million and gross margin to 25.5% whilst also growing revenue by 3% to A$109.5 million. An improved merchandising offer has seen average order value increase 15%, in line with the group trend, to A$83.

 

The improvement in gross margin has been achieved despite the challenge of weaker AUD exchange rates increasing the local cost of internationally sourced goods.

 

While the group's operation in ANZ is long established, it continues to provide attractive growth possibilities due to both the lower levels of internet penetration, versus territories such as the United Kingdom and the USA, and this region's relative lack of off-price retailers.

 

This region shall benefit from the recent acquisition of three online retail websites which is described in more detail below.

 

South-East Asia

During the period this region had revenue growth of 8% to A$15.5 million and an excellent 187% increase in gross profit to A$3.9 million, principally driven by a doubling of the gross margin percentage to 24.9%. The growth in profitability has been supported by the group's localisation plan for each territory which ensures that merchandising, pricing, payment and shipping solutions are all tailored to the needs of local consumers. A 33% rise in average order value to A$91 is testimony to the relevance of the group's online retail offer in this region.

 

The significant improvement in the rate of gross margin has been achieved by the localised plan, an expanded range of merchandise, including own-buy inventory, and fewer delivery promotions and this increased rate represents the group's expectation for future performance.

 

The group's strategy for this territory has been to firstly grow the active member base and then to build gross profitability and, with a more profitable model now established, South-East Asia reinforces its position as a key element of the group's growth strategy.

 

In the medium to long term this region is anticipated to be increasingly significant as the group grows the member base and demand for branded products, particularly European and USA brands, is expected to grow. With a substantial addressable population, increasing disposable income, lack of off-price competition and high mobile penetration this region is well served by the group's strong value, branded sales offer and exceptional mobile commerce capability.

Rest of World

This segment comprises the group's nascent operations within the United Kingdom, re-launched in H2 2015 and trading under the Cocosa brand which provides members compelling value in premium branded products. Cocosa had a positive first half with sales increasing by more than 50% to A$3.3 million and gross profit rising more than twofold. These are encouraging results and position the business for increased growth in the second half of the year.

 

Whilst currently a relatively small part of the group's overall activities, this business operates in the UK's large and well developed online marketplace where engaged and active consumers can be acquired successfully. Given there is no online flash sale operator of scale in the UK the group has targeted becoming a leading operator in the country.

 

Group

The basis of the group's improved trading and financial performance in this half-year has its roots back in FY2015 when the group re-focused the business on its core aims of providing exceptional value branded products to our customers and exceptional inventory management solutions to our brand partners within the group's three core territories. Whilst there is still work to do momentum has increased and the first half just closed represents another step on the path of profitable growth.

 

The improved trading performance and gross profit has combined with lower rates of overhead cost (circa 24% of revenue) and delivered underlying EBITDA of $1.5 million for the half, in sharp contrast to the EBITDA loss of A$11.4 million loss incurred in the first half last year. A cost saving programme saw the rate of costs in staff and marketing costs notably lower than the same period in the prior year. The group has however increased investment into its technology capabilities and has a robust and scalable platform on which to grow the business.

 

During the period the group continued to dedicate nearly all its marketing spend, which was circa 6% of revenue in the period, into measurable digital channels and has seen the loyal and engaged members continue to spend with reliable regularity and with increasing order sizes.

 

Many new brands, including a number from Arcadia, have joined our roster, attracted by the group's excellence in inventory management and our ability to efficiently dispose of their surplus products. The group's unique international distribution capability is a particular point of difference for European and USA brands.

 

The group implemented its strategy to increase the proportion of inventory that is own-buy, rather than on a consignment basis, and that now represents circa 13% of online activity and that in turn supports higher gross margins and wider product selection for customers. Own-buy activity is concentrated into staple, branded goods. We are now a little over 12 months into the plan to re-focus our buying teams and have seen the benefits begin to accrue as relationships with brands and suppliers strengthen and deepen and, in the period, a number of exclusive sourcing arrangements were concluded.

 

The combination of the group's sourcing, compelling consumer value and reliable service means that returned goods remain at industry leading levels of only 5-6% overall.

 

The group has over 29,000 square metres of warehouse space which house the digital studios and distribution centres and these have the capacity to absorb significant growth. The processes of these operations are continually refined to deliver the most efficient workflows and ensure the group's customers receive the products they select within the timeframes they expect. During this period improved technology deployment in this area reduced unit processing costs by around 20% and dispatch times by around 7%.

 

Balance sheet, cash and working capital

The group's closing cash balance was A$30.0 million versus A$39.9 million at the year-end and this reduction is largely a reflection of the increase in inventory during the first half. This increase arises principally from the group's investment into own-buy inventory, in line with the strategic plan, together with opportunistic, seasonal purchases made towards the end of the half-year.

 

Inventory is now at a closer level to that which will support the continued growth of the group's own-buy business. We would expect further growth in inventory levels to be more in line with the overall growth of the business.

The group anticipates that working capital balances will unwind in the second half of the year as the seasonal and opportunistic inventory is reduced.

Capital expenditure during the period was A$225,000, lower than the prior period, and principally represents equipment in the group's distribution centres. The investment into intangibles of A$1.3 million represents expenditure on the group's technology platform.

 

Acquisition of Australian online retail websites

The group completed the acquisition of three Australian online retail websites, on 31 January 2016. The acquisition includes the domain names 'OO.com.au'; 'dealsdirect.com.au'; and 'topbuy.com.au' and all associated customer databases, intellectual property, trademarks and goodwill. 

 

This acquisition provides an online retail opportunity that is highly complementary to the group's core flash sale model and it will facilitate one of the broadest customer reaches of an Australian based online retailer; widen the product selection for customers and leverage the groups existing infrastructure.

 

The three websites all fit with MySale's hard discount strategy and offer compelling value to consumers, principally across the key MySale categories of Home and Fashion but also low price unbranded, fun Gifts. The group will realise a number of strategic benefits from this acquisition;

·      The average monthly visitors to these websites will double the 4.1 million visitors to the group's existing Australian websites.

·      It will significantly increase the Australian active customer base and whilst having little overlap with MySale's existing customer base the customers are of a similar profile.

·      The ability to offer the enlarged customer base access to a significantly expanded range of merchandise. An increase to over 200,000 available SKU's is targeted in the first phase. Of the expanded product range it is anticipated over 90% will be supplied on a drop ship basis.

·      By establishing an Australian low-inventory online retail offer, which complements the group's core flash model, we will be positioned to achieve further strategic growth into a marketplace solution. 

·      Once fully established this online retail model will be capable of export and replication in the group's other operating territories.

·      The group's existing marketing, technology, logistics and back-office systems can be deployed to support this online retail offer and the increased scale of the operation shall allow efficiencies to be achieved throughout the supply chain.

 

Outlook

The group had a good start to FY2016 as the planned strategic initiatives have delivered both improved financial performance and positioned the group for further, profitable, growth.

In the first half improved trading in all our territories is testimony to the focus and hard work of all the teams over the last 12 months. That our South-East Asian operation saw such strong growth in revenue and gross profit is evidence that our strategy is working in this market and we aim to develop this significant market opportunity to further diversify the group's future income streams.

 

The positive momentum of first half trading has carried into the opening months of the second half with double digit revenue growth to date. The Board is confident the group is on track to meet its expectations for the financial year as a whole and will continue to focus on driving profitable growth.

 

The acquisition of the online retail business in Australia from Grays eCommerce is a great opportunity to add customers, scale and efficiency to the business and the integration will be completed during the second half of the financial year.

 

Our focus for the second half is to deliver on the strategic aims; grow the active customer base, increase activation levels and continue increasing gross margins.

 

MySale Group Plc

 

 

Statements of profit or loss and other comprehensive income

 

 

For the six months ended 31 December 2015

 

 

 

 

 

Note

Reviewed

six months

31 December 2015

Reviewed

six months

31 December 2014

Audited

year ended

30 June

2015

 

 

 

 

A$'000

A$'000

A$'000

 

Revenue

 

 

 

 

 

 

 

 

 

Revenue from sale of goods

 

 

 

128,230

 

123,261

 

235,853

 

Cost of sale of goods

 

 

 

(95,503)

 

(94,911)

 

(180,621)

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

32,727

 

28,350

 

55,232

 

 

Other operating gains/(loss), net

 

 

 

971

 

463

 

204

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

 

 

50

 

218

 

195

 

Finance costs

 

 

 

(22)

 

(162)

 

(58)

 

Finance income, net

 

 

 

28

 

56

 

137

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Selling and distribution expenses

 

 

 

(19,249)

 

(31,636)

 

(47,952)

 

Administration expenses

 

 

 

(14,931)

 

(15,563)

 

(28,969)

 

Share of loss of joint venture

 

 

 

(43)

 

(77)

 

(116)

 

 

Loss before income tax (expense)/benefit

 

 

 

(497)

 

(18,407)

 

(21,464)

 

 

Income tax (expense)/benefit

 

6

 

(119)

 

4,825

 

3,675

 

 

Profit/(loss) after income tax (expense)/benefit for the half-year attributable to the owners of MySale Group Plc

 

 

 

(616)

 

(13,582)

 

(17,789)

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

 

 

 

 

Net change in the fair value of cash flow hedges taken to equity, net of tax

 

 

 

(684)

 

782

 

740

 

Foreign currency translation

 

 

 

4

 

3,480

 

6,219

 

 

Other comprehensive income for the half-year, net of tax

 

 

 

(680)

 

4,262

 

6,959

 

 

Total comprehensive income for the half-year attributable to the owners of MySale Group Plc

 

 

 

(1,296)

 

(9,320)

 

(10,830)

 

 

 

 

 

 

Cents

Cents

Cents

 

 

 

 

 

 

 

 

Basic earnings per share

 

16

 

(0.41)

(9.02)

(11.81)

Diluted earnings per share

 

16

 

(0.41)

(9.02)

(11.81)

 

 

The above statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

 

MySale Group Plc

Balance sheets

As at 31 December 2015

 

 

Note

Reviewed

six months

31 December 2015

Reviewed

six months

31 December 2014

Audited

year ended

30 June

2015

 

 

 

 

 

A$'000

 

A$'000

 

A$'000

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

7

 

29,978

 

59,403

 

39,853

 

Trade and other receivables

 

 

 

22,180

 

3,895

 

23,630

 

Inventories

 

 

 

35,145

 

14,008

 

17,880

 

Derivative financial instruments

 

 

 

-

 

63

 

22

 

Income tax receivable

 

 

 

-

 

2,053

 

1,643

 

Other

 

 

 

8,162

 

3,188

 

4,736

 

Total current assets

 

 

 

95,465

 

82,610

 

87,764

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

Investments in joint venture

 

 

 

91

 

173

 

134

 

Property, plant and equipment

 

8

 

2,466

 

3,863

 

3,023

 

Intangibles

 

9

 

23,468

 

22,503

 

23,517

 

Deferred tax

 

10

 

10,986

 

10,494

 

10,320

 

Total non-current assets

 

 

 

37,011

 

37,033

 

36,994

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

132,476

 

119,643

 

124,758

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

 

29,991

 

25,883

 

29,240

 

Borrowings

 

11

 

6,590

 

111

 

1,189

 

Derivative financial instruments

 

 

 

662

 

-

 

-

 

Income tax payable

 

 

 

1,234

 

618

 

1,234

 

Provisions

 

 

 

1,941

 

2,614

 

2,115

 

Deferred revenue

 

 

 

13,277

 

10,009

 

11,147

 

Total current liabilities

 

 

 

53,695

 

39,235

 

44,925

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

Borrowings

 

12

 

-

 

109

 

64

 

Provisions

 

 

 

636

 

43

 

328

 

Total non-current liabilities

 

 

 

636

 

152

 

392

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

54,331

 

39,387

 

45,317

 

 

Net assets

 

 

 

78,145

 

80,256

 

79,441

 

 

 

Equity

 

 

 

 

 

 

 

 

 

Share premium account

 

 

 

306,363

 

306,363

 

306,363

 

Other reserves

 

 

 

(123,611)

 

(126,323)

 

(122,931)

 

Accumulated losses

 

 

 

(104,607)

 

(99,784)

 

(103,991)

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

 

78,145

 

80,256

 

79,441

 

 

The interim financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors and authorised for issue on 29 February 2016. They were signed on its behalf by:

 

 

 

 

 

 

Carl Jackson

 

Andrew Dingle

Director

 

Director 

 

 

 

The above balance sheets should be read in conjunction with the accompanying notes

 

MySale Group Plc

 

 

Statements of changes in equity

 

 

For the six months ended 31 December 2015

 

 

 

 

 

Share premium

 

Other 

 

Accumulated

 

Total

 

 

account 

 

reserves

 

losses

 

equity

 

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Balance at 1 July 2014

 

306,363

 

(133,595)

 

(86,202)

 

86,566

 

 

 

 

 

 

 

 

 

Loss after income tax benefit for the half-year

 

-

 

-

 

(13,582)

 

(13,582)

Other comprehensive income for the half-year, net of tax

 

-

 

4,262

 

-

 

4,262

 

 

 

 

 

 

 

 

 

Total comprehensive income for the half-year

 

-

 

4,262

 

(13,582)

 

(9,320)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

 

 

Share-based payments

 

-

 

3,010

 

-

 

3,010

 

 

 

 

 

 

 

 

 

Balance at 31 December 2014

 

306,363

 

(126,323)

 

(99,784)

 

80,256

 

 

 

 Share premium

 

 Other

 

Accumulated

 

Total

 

 

account

 

reserves

 

losses

 

equity

 

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Balance at 1 July 2015

 

306,363

 

(122,931)

 

(103,991)

 

79,441

 

 

 

 

 

 

 

 

 

Loss after income tax (expense)/benefit for the half-year

 

-

 

-

 

(616)

 

(616)

Other comprehensive income for the half-year, net of tax

 

-

 

(680)

 

-

 

(680)

 

 

 

 

 

 

 

 

 

Total comprehensive income for the half-year

 

-

 

(680)

 

(616)

 

(1,296)

 

 

 

 

 

 

 

 

 

Balance at 31 December 2015

 

306,363

 

(123,611)

 

(104,607)

 

78,145

 

 

 

 

Share premium

 

Other 

 

Accumulated

 

Total

 

 

account 

 

reserves

 

losses

 

equity

 

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Balance at 1 July 2014

 

306,363

 

(133,595)

 

(86,202)

 

86,566

 

 

 

 

 

 

 

 

 

Loss after income tax (expense)/benefit for the half-year

 

-

 

-

 

(17,789)

 

(17,789)

Other comprehensive income for the half-year, net of tax

 

-

 

6,959

 

-

 

6,959

 

 

 

 

 

 

 

 

 

Total comprehensive income for the half-year

 

-

 

6,959

 

(17,789)

 

(10,830)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

 

 

Share-based payments

 

-

 

3,705

 

-

 

3,705

 

 

 

 

 

 

 

 

 

Balance at 30 June 2015

 

306,363

 

(122,931)

 

(103,991)

 

79,441

 

 

The above statements of changes in equity should be read in conjunction with the accompanying notes

 

MySale Group Plc

 

 

 

Statements of cash flows

 

 

 

For the six months ended 31 December 2015

 

 

 

 

 

Note

Reviewed

six months

31 December 2015

Reviewed

six months

31 December 2014

Audited

year ended

30 June

2015

 

 

 

 

 

A$'000

 

A$'000

 

A$'000

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Loss before income tax (expense)/benefit for the period

 

 

 

(497)

 

(18,407)

 

(21,464)

 

 

 

 

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

 

 

 

2,042

 

1,596

 

3,434

 

Net loss/(gain) on disposal of property, plant and equipment

 

 

 

(14)

 

-

 

71

 

Share of loss - joint ventures

 

 

 

43

 

-

 

116

 

Share-based payments

 

 

 

-

 

3,010

 

3,705

 

Interest income

 

 

 

(50)

 

(105)

 

(195)

 

Interest expense

 

 

 

22

 

49

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,546

 

(13,857)

 

(14,275)

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Decrease/(increase) in trade and other receivables

 

 

 

1,494

 

(78)

 

(19,508)

 

Increase in inventories

 

 

 

(17,265)

 

(1,205)

 

(5,077)

 

Decrease/(increase) in other operating assets

 

 

 

(3,386)

 

12,758

 

11,760

 

Increase/(decrease) in trade and other payables

 

 

 

762

 

(7,177)

 

(1,728)

 

Increase/(decrease) in other provisions

 

 

 

134

 

(1,193)

 

(5,407)

 

Increase/(decrease) in deferred revenue

 

 

 

2,130

 

(5,607)

 

(4,469)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,585)

 

(16,359)

 

(38,704)

 

Interest received

 

 

 

50

 

105

 

195

 

Interest paid

 

 

 

(22)

 

(49)

 

(58)

 

Income taxes refunded

 

 

 

818

 

-

 

-

 

Income taxes paid

 

 

 

-

 

(256)

 

(49)

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

 

(13,739)

 

(16,559)

 

(38,616)

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Payments for new joint venture capital invested

 

 

 

-

 

-

 

(104)

 

Payments for property, plant and equipment

 

8

 

(225)

 

(1,182)

 

(1,033)

 

Payments for intangibles

 

9

 

(1,320)

 

(1,039)

 

(3,026)

 

Payments for security deposits

 

 

 

(39)

 

(75)

 

-

 

Proceeds from disposal of property, plant and equipment

 

 

 

120

 

-

 

51

 

Net cash used in investing activities

 

 

 

(1,464)

 

(2,296)

 

(4,112)

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

 

7,812

 

-

 

2,467

 

Repayment of borrowings

 

 

 

(2,428)

 

(1,390)

 

(2,759)

 

Repayment of leases

 

 

 

-

 

-

 

(330)

 

Net proceeds from hedging activities

 

 

 

-

 

(782)

 

-

 

Repayments of leases

 

 

 

(46)

 

(265)

 

-

 

 

 

 

 

 

 

 

 

 

 

Net cash from/(used in) financing activities

 

 

 

5,338

 

(2,437)

 

(622)

 

 

Net decrease in cash and cash equivalents

 

 

 

(9,865)

 

(21,292)

 

(43,350)

 

Cash and cash equivalents at the beginning of the financial period

 

 

 

39,853

 

77,344

 

77,344

 

Effects of exchange rate changes on cash

 

 

 

(10)

 

3,351

 

5,859

 

Cash and cash equivalents at the end of the financial period

 

7

 

29,978

 

59,403

 

39,853

 

 

 

The above statements of cash flows should be read in conjunction with the accompanying notes

 

MySale Group Plc

 

 

Notes to the financial statements

 

 

31 December 2015

 

 

 

Note 1. General information

 

MySale Group Plc is a group consisting of MySale Group Plc (the 'company' or 'parent entity') and its subsidiaries (the 'group'). The financial statements of the group, in line with the location of the majority of the group's operations and customers, are presented in Australian dollars rounded to the nearest thousand.

 

The principal business of the group is the operation of online shopping outlets for consumer goods including; ladies, men and children's fashion clothing, accessories, beauty and homeware items.

 

MySale Group Plc is a public limited company listed on the AIM (Alternative Investment Market), a sub-market of the London Stock Exchange. The company was incorporated and registered in Jersey on 28 April 2014 under the Companies (Jersey) Law 1991. The Company is domiciled in Australia.

 

The registered office of the company is Ogier House, The Esplanade, St Helier, Jersey JE4 9WG and principal place of business is at Unit 5, 111 Old Pittwater Road, Brookvale, NSW 2100, Australia.

 

The financial statements were authorised for issue, in accordance with a resolution of directors, on 29 February 2016. The directors have the power to amend and reissue the financial statements.

 

Note 2. Significant accounting policies

 

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the half-years presented, unless otherwise stated.

 

These financial statements for the interim half-year reporting period ended 31 December 2015 have been prepared in accordance with International Accounting Standards IAS 34 'Interim Financial Reporting'.

 

These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2015 and any public announcements made by the company during the interim reporting period.

 

New, revised or amending Accounting Standards and Interpretations adopted

The group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the International Accounting Standards Board that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the group during the financial half-year ended 31 December 2015 and are not expected to have any significant impact for the full financial year ending 30 June 2016.

 

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

 

Amounts in this report have been rounded off to the nearest thousand dollars, or in certain cases, the nearest dollar.

 

Change in Accounting Policies 

The Financial Reporting Council issued changes to the UK financial reporting framework, which will result in companies reporting either under the principles of EU-adopted IFRSs or a new set of UK financial reporting standards. In certain cases companies will be able to report reduced disclosures. This new financial reporting framework is effective for stand along Company accounts for the year ending 30 June 2016 and is required to be applied retrospectively. 

Adoption of Financial Reporting Standards (FRS) 101 UK GAAP
MySale Group plc will adopt FRS 101 in the standalone entity financial statements of the Company for the year ended 30 June 2016. No disclosure in the current UK GAAP financial statements would be omitted on adoption of FRS 101. A shareholder or shareholders holding in aggregate 5% or more of the total allotted shares in MySale Group plc may serve objections to the use of the disclosure exemptions on MySale Group plc, in writing, to its registered office, as detailed above, no later than 30 April 2016.

 

Note 3. Critical accounting judgements, estimates and assumptions

 

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. There are no critical accounting judgements, estimates and assumptions that are likely to affect the current or future financial years. These judgements, estimates and assumptions have been consistently applied to all the half-years presented, unless otherwise stated.

 

Note 4. Operating segments

 

Identification of reportable operating segments

The group's operating segments are determined based on the internal reports that are reviewed and used by the Board of Directors (being the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

 

The CODM reviews contribution by reportable segments, being geographical regions, to revenue and gross profit. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in these financial statements.

 

The group's operates separate websites in each country that it sells goods in. Revenue from external customers is attributed to each country based on the activity on that countries website. Similar types of goods are sold in all segments. The group's operations are unaffected by seasonality.

 

Intersegment transactions

Intersegment transactions were made at market rates and are eliminated on consolidation.

 

Segment assets and liabilities

Assets and liabilities are managed on a group basis. The CODM does not regularly review any asset or liability information by segment and, accordingly there is no separate segment information. Refer to the consolidated balance sheet for group assets and liabilities.

 

 

Operating segment information

 

 

 

Australia and

 

 

 

 Rest of

 

 

 

 

New Zealand 

 

Asia

 

 World

 

Total

Six months reviewed 31 December 2015

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

Sales to external customers

 

109,482

 

15,457

 

3,291

 

128,230

Total revenue

 

109,482

 

15,457

 

3,291

 

128,230

 

 

 

 

 

 

 

 

 

Gross profit

 

27,907

 

3,852

 

968

 

32,727

Other operating gains, net

 

 

 

 

 

 

 

971

Selling and distribution expenses

 

 

 

 

 

 

 

(19,249)

Administration expenses

 

 

 

 

 

 

 

(14,931)

Finance income, net

 

 

 

 

 

 

 

28

Share of loss of joint venture accounted for using the equity method

 

 

 

 

 

 

 

(43)

Loss before income tax expense

 

 

 

 

 

 

 

(497)

Income tax expense

 

 

 

 

 

 

 

(119)

Loss after income tax expense

 

 

 

 

 

 

 

(616)

 

 

 

 

 

 

 

 

 

 

 

 

Australia and

 

 

 

 Rest of

 

 

 

 

New Zealand

 

Asia

 

 World

 

Total

Six months reviewed 31 December 2014

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

Sales to external customers

 

106,802

 

14,339

 

2,120

 

123,261

Total revenue

 

106,802

 

14,339

 

2,120

 

123,261

 

 

 

 

 

 

 

 

 

Gross Profit

 

26,595

 

1,340

 

415

 

28,350

Other operating gains, net

 

 

 

 

 

 

 

463

Selling and distribution expenses

 

 

 

 

 

 

 

(31,636)

Administration expenses

 

 

 

 

 

 

 

(15,563)

Finance income, net

 

 

 

 

 

 

 

56

Share of loss of joint venture accounted for using the equity method

 

 

 

 

 

 

 

(77)

Loss before income tax benefit

 

 

 

 

 

 

 

(18,407)

Income tax benefit

 

 

 

 

 

 

 

4,825

Loss after income tax benefit

 

 

 

 

 

 

 

(13,582)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Australia and

New Zealand

 

Asia

 

 Rest of

 

Total

 

 

Year ended 30 June 2015

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

Sales to external customers

 

205,340

 

26,333

 

4,180

 

235,853

 

 

Total revenue

 

205,340

 

26,333

 

4,180

 

235,853

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

50,879

 

3,472

 

881

 

55,232

 

 

Other operating gains, net

 

 

 

 

 

 

 

204

 

 

Selling and distribution expenses

 

 

 

 

 

 

 

(47,952)

 

 

Administration expenses

 

 

 

 

 

 

 

(28,969)

 

 

Finance income, net

 

 

 

 

 

 

 

137

 

 

Share of loss of joint venture accounted for using the equity method

 

 

 

 

 

 

 

(116)

 

 

Loss before income tax benefit

 

 

 

 

 

 

 

(21,464)

 

 

Income tax benefit

 

 

 

 

 

 

 

3,675

 

 

Loss after income tax benefit

 

 

 

 

 

 

 

(17,789)

 

 

 

 

 

 

 

 

 

 

 

 

                     

 

Note 5. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation)

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA reconciliation

 

 

 

 

 

 

 

Loss before income tax

 

(497)

 

(18,407)

 

(21,464)

 

Add: Non-controlling interest

 

43

 

77

 

116

 

Less: Interest income

 

(50)

 

(218)

 

(195)

 

Add: Interest expense

 

22

 

162

 

58

 

Add: Depreciation and amortisation

 

2,042

 

1,596

 

3,434

 

 

 

 

 

 

 

 

 

EBITDA

 

1,560

 

(16,790)

 

(18,051)

 

 

 

 

 

 

 

 

 

Underlying EBITDA represents EBITDA adjusted for significant, unusual and other one-off items.

 

 

 

 

 

 

 

 

Underlying EBITDA reconciliation

 

 

 

 

 

 

 

EBITDA

 

1,560

 

(16,790)

 

(18,051)

 

Reorganisation and discontinued operations

 

12

 

2,518

 

3,493

 

Advertising one off (TV and Print)

 

-

 

3,216

 

3,216

 

Listing costs

 

71

 

(357)

 

(356)

 

Loss on revaluation of long term incentive plan

 

-

 

-

 

519

 

Acquisition costs - fixed price retail

 

618

 

-

 

-

 

Consulting fees - potential acquisitions

 

37

 

-

 

-

 

Unrealised FX gain/(loss) revaluation

 

(790)

 

(15)

 

1,336

 

 

 

 

 

 

 

 

 

Underlying EBITDA

 

1,508

 

(11,428)

 

(9,843)

 

 

 

 

 

 

 

 

 

 

Note 6. Income tax expense/(benefit)

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Income tax expense/(benefit)

 

 

 

 

 

 

 

Current tax

 

810

 

669

 

1,194

 

Deferred tax - origination and reversal of temporary differences

 

(881)

 

(5,344)

 

(5,013)

 

Adjustment recognised for prior periods

 

190

 

-

 

144

 

Other adjustment

 

-

 

(150)

 

-

 

 

 

 

 

 

 

 

 

Aggregate income tax expense/(benefit)

 

119

 

(4,825)

 

(3,675)

 

 

 

 

 

 

 

 

 

Deferred tax included in income tax expense/(benefit) comprises:

 

 

 

 

 

 

 

Increase in deferred tax assets (note 10)

 

(881)

 

(5,344)

 

(5,013)

 

 

 

 

 

 

 

 

 

Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate

 

 

 

 

 

 

 

Loss before income tax (expense)/benefit

 

(497)

 

(18,407)

 

(21,464)

 

 

 

 

 

 

 

 

 

Tax at the statutory tax rate of 26.56% (2014: 28.35%)

 

(132)

 

(5,218)

 

(6,761)

 

 

 

 

 

 

 

 

 

Tax effect amounts which are not deductible/(taxable) in calculating taxable income:

 

 

 

 

 

 

 

Non-deductible expenses

 

196

 

(260)

 

704

 

Tax incentive

 

-

 

(9)

 

-

 

Capitalisation of Long Term Incentive

 

-

 

734

 

-

 

Net Exchange gain of capital nature

 

-

 

78

 

-

 

Tax revaluation upon group restructure

 

-

 

-

 

2,280

 

Sundry items

 

-

 

(150)

 

-

 

 

 

 

 

 

 

 

 

 

 

(64)

 

(4,825)

 

(3,777)

 

Adjustment recognised for prior periods

 

190

 

-

 

144

 

Current half-year tax losses not recognised

 

34

 

-

 

48

 

Expected changes in future tax rates

 

(29)

 

-

 

-

 

Difference in overseas tax rates

 

(140)

 

-

 

(90)

 

 

 

 

 

 

 

 

 

Income tax expense/(benefit)

 

119

 

(4,825)

 

(3,675)

 

 

 

Tax at the statutory tax rate represents the effective rate of income tax across the jurisdictions in which each of the group entities are domiciled.

 

The tax rates of the main jurisdictions are Australia 30% (2014: 30%), Singapore 17% (2014: 17%), New Zealand 28% (2014: 28%), United Kingdom 20% (2014: 20%) and United States 42.8% (2014: 23.84%).

 

 

Note 7. Current assets - cash and cash equivalents

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Cash at bank

 

22,578

 

21,122

 

39,853

 

Bank deposits at call

 

5,200

 

38,281

 

-

 

Bank deposits - pledged *

 

2,200

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

29,978

 

59,403

 

39,853

 

 

Bank deposits - pledged

The pledged bank deposits are in relation to trade acquisition (note 17) and have been placed in an Escrow account where the funds are restricted.

 

 

 

 

Note 8. Non-current assets - property, plant and equipment

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Leasehold improvements - at cost

 

996

 

926

 

942

 

Less: Accumulated depreciation

 

(668)

 

(456)

 

(563)

 

 

 

328

 

470

 

379

 

 

 

 

 

 

 

 

 

Plant and equipment - at cost

 

4,779

 

4,514

 

4,640

 

Less: Accumulated depreciation

 

(3,041)

 

(2,162)

 

(2,582)

 

 

 

1,738

 

2,352

 

2,058

 

 

 

 

 

 

 

 

 

Fixtures and fittings - at cost

 

859

 

1,189

 

836

 

Less: Accumulated depreciation

 

(533)

 

(382)

 

(456)

 

 

 

326

 

807

 

380

 

 

 

 

 

 

 

 

 

Motor vehicles - at cost

 

409

 

534

 

538

 

Less: Accumulated depreciation

 

(335)

 

(300)

 

(332)

 

 

 

74

 

234

 

206

 

 

 

 

 

 

 

 

 

 

 

2,466

 

3,863

 

3,023

 

 

 

 

Leasehold

 

Plant and

 

Fixtures

 

Motor

 

 

 

 

improvements

 

equipment

 

and fittings

 

vehicles

 

Total

 

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2015

 

379

 

2,058

 

380

 

206

 

3,023

 

 

 

 

 

 

 

 

 

 

 

Additions

 

60

 

141

 

24

 

-

 

225

Disposals

 

(4)

 

(9)

 

-

 

(107)

 

(120)

Exchange differences

 

-

 

16

 

-

 

-

 

16

Transfers in/(out)

 

-

 

4

 

-

 

2

 

6

Depreciation expense

 

(107)

 

(472)

 

(78)

 

(27)

 

(684)

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2015

 

328

 

1,738

 

326

 

74

 

2,466

 

 

Note 9. Non-current assets - intangibles

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Goodwill - at cost

 

16,849

 

16,849

 

16,849

 

 

 

 

 

 

 

 

 

Customer relationships - at cost

 

2,274

 

2,019

 

2,294

 

Less: Accumulated amortisation

 

(1,136)

 

(336)

 

(765)

 

 

 

1,138

 

1,683

 

1,529

 

 

 

 

 

 

 

 

 

Software - at cost

 

5,536

 

3,717

 

4,595

 

Less: Accumulated amortisation

 

(2,328)

 

(1,161)

 

(1,683)

 

 

 

3,208

 

2,556

 

2,912

 

 

 

 

 

 

 

 

 

ERP system

 

3,460

 

1,977

 

3,084

 

Less: Accumulated amortisation

 

(1,187)

 

(562)

 

(857)

 

 

 

2,273

 

1,415

 

2,227

 

 

 

 

 

 

 

 

 

 

 

23,468

 

22,503

 

23,517

 

 

 

 

 

 

Customer

 

 

 

ERP

 

 

 

 

 Goodwill

 

relationships

 

Software

 

system

 

Total

Consolidated

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2015

 

16,849

 

1,529

 

2,912

 

2,227

 

23,517

 

 

 

 

 

 

 

 

 

 

 

Additions

 

-

 

-

 

944

 

376

 

1,320

Disposals

 

-

 

-

 

(19)

 

-

 

(19)

Exchange differences

 

-

 

5

 

5

 

-

 

10

Transfers in/(out)

 

-

 

-

 

(2)

 

-

 

(2)

Amortisation expense

 

-

 

(396)

 

(632)

 

(330)

 

(1,358)

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2015

 

16,849

 

1,138

 

3,208

 

2,273

 

23,468

 

 

 

Note 10. Non-current assets - deferred tax

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Deferred tax asset comprises temporary differences attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts recognised in profit or loss:

 

 

 

 

 

 

 

Tax losses

 

8,649

 

7,989

 

8,863

 

Accrued expenses

 

1,277

 

632

 

310

 

Provisions

 

604

 

633

 

807

 

Sundry

 

1,324

 

1,853

 

1,592

 

Property, plant and equipment

 

(757)

 

(415)

 

(946)

 

Intangibles

 

(205)

 

(336)

 

(306)

 

ACA Adjustment

 

-

 

150

 

-

 

Exchange gain/(loss)

 

94

 

(12)

 

-

 

 

 

 

 

 

 

 

 

Deferred tax asset

 

10,986

 

10,494

 

10,320

 

 

 

 

 

 

 

 

 

Movements:

 

 

 

 

 

 

 

Opening balance

 

10,320

 

5,396

 

5,396

 

Credited to profit or loss (note 6)

 

881

 

5,344

 

5,013

 

Additions through business combinations

 

-

 

-

 

-

 

Transfer to share-based payments reserve

 

-

 

(234)

 

-

 

Exchange gain/(loss)

 

(215)

 

(12)

 

(89)

 

 

 

 

 

 

 

 

 

Closing balance

 

10,986

 

10,494

 

10,320

 

 

 

Deferred income tax assets are recognised for tax losses, non-deductible accruals and provisions and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable.

 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

 

Note 11. Current liabilities - borrowings                                                                                                  

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Bank loans

 

6,481

 

-

 

1,098

 

Finance lease liability

 

109

 

111

 

91

 

 

 

 

 

 

 

 

 

 

 

6,590

 

111

 

1,189

 

 

 

Note 12. Non-current liabilities - borrowings

 

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Finance lease liability

 

-

 

109

 

64

 

 

Total secured liabilities

The total secured liabilities (current and non-current) are as follows:

 

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Bank loans

 

6,481

 

-

 

1,098

 

Finance lease liability

 

109

 

220

 

155

 

 

 

 

 

 

 

 

 

 

 

6,590

 

220

 

1,253

 

 

In November 2015, the group entered a new borrowing facility with Australia and New Zealand Banking Group Limited ('ANZ'). The facility comprises a cash advance facility, an interchangeable facility, an asset financing facility, an electronic payaway facility and a commercial card facility. The combined facility limit is A$12,233,000 (30 June 2015: A$7,174,000 and at 31 December 2014: A$4,500,000). The group is required to comply with four covenants in relation to this facility:

 

(i)   On a half-yearly basis, EBITDA must exceed specific agreed amounts based on the group's budget;

(ii)   On a half-yearly basis, sales must exceed specific agreed amounts based on the group's budget;

(iii)  At any time, the Current Ratio (referring the ratio of Total Current Assets to Total Current Liabilities) must exceed 1.50:1.00; and

(iv)  Distributions to shareholders must not be made without the written consent of ANZ.

 

The group is in compliance with all four covenants as of the reporting date.

 

The group also has a GBP3,000,000 (30 June 2015: GBP3,000,000 and at 31 December 2014: GBP3,000,000) borrowing facility with HSBC Bank Plc secured by a corporate composite guarantee.

 

Assets pledged as security

All bank borrowings of the group are secured by a Corporate Guarantee and Indemnity. Average interest rate incurred on these bank borrowings was 2.15% (30 June 2015: 2.10% and at 31 December 2014: 2.90%).

 

The lease liabilities are effectively secured as the rights to the leased assets, recognised in the balance sheet, revert to the lessor in the event of default.

 

 

Note 13. Fair value measurement

 

Fair value hierarchy

The following tables detail the group's and company's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

31 December 2015

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Derivative financial instruments

 

-

 

662

 

-

 

662

Total liabilities

 

-

 

662

 

-

 

662

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

31 December 2014

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Derivative financial instruments

 

-

 

63

 

-

 

63

Total assets

 

-

 

63

 

-

 

63

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

30 June 2015

 

A$'000

 

A$'000

 

A$'000

 

A$'000

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Derivative financial instruments

 

-

 

22

 

-

 

22

Total assets

 

-

 

22

 

-

 

22

 

There were no transfers between levels during the financial half-year.

 

The carrying values of other financial assets and financial liabilities presented in these financial statements represent a reasonable approximation of fair value.

 

 

Note 14. Contingent liabilities

 

The group issued a bank guarantee through its banker, ANZ, in respect of lease obligations amounting to A$874,000 (30 June 2015: A$874,000 and 31 December 2014: A$874,000). The group also issued a bank guarantee through ANZ in respect of a merchant fee agreement deposit amounting to USD$2,100,000 (30 June 2015: USD$2,100,000 and 31 December 2014: USD$2,100,000).

 

The group also issued a bank guarantee through its banker ANZ Bank New Zealand Limited, in respect of customs and duties obligations amounting to NZ$150,000 (30 June 2015: NZ$100,000 and 31 December 2014: NZ$60,000).

 

Note 15. Related party transactions

 

Parent entity

MySale Group Plc is the parent company of the group.

 

Transactions with related parties

The following transactions occurred with related parties:

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$

 

A$

 

A$

 

 

 

 

 

 

 

 

 

Sale of goods and services:

 

 

 

 

 

 

 

Sale of goods to other related party (Arcadia Group Ltd and Sports Direct International plc)

 

15,262,714

 

-

 

5,236,496

 

Sale of freight services to other related party

 

270,037

 

-

 

1,299,867

 

 

 

 

 

 

 

 

 

Payment for goods and services:

 

 

 

 

 

 

 

Purchase of goods from other related party

 

60,238

 

168,000

 

2,032,419

 

 

 

 

 

 

 

 

 

Payment for other expenses:

 

 

 

 

 

 

 

Interest paid to other related party

 

-

 

204,000

 

-

 

 

 

 

 

 

 

 

 

 

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

 

 

 

 

 

 

Reviewed

six months

31 December 2015

 

Reviewed

six months

31 December 2014

 

Audited

year ended

30 June

2015

 

 

 

A$

 

A$

 

A$

 

 

 

 

 

 

 

 

 

Current receivables:

 

 

 

 

 

 

 

Trade receivables from joint venture

 

-

 

495,000

 

-

 

Trade receivables from other related party

 

11,415,309

 

204,000

 

6,674,062

 

 

 

 

 

 

 

 

 

Current payables:

 

 

 

 

 

 

 

Trade payables to other related party

 

159,052

 

-

 

1,739,631

 

 

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

 

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

 

 

Note 16. Earnings per share

 

Reviewed

six months

31 December

 

Reviewed

six months

31 December

Audited

year ended

30 June

 

 

 

2015

 

2014

2015

 

 

 

A$'000

 

A$'000

A$'000

 

 

 

 

 

 

 

 

Loss after income tax attributable to the owners of MySale Group Plc

 

(616)

 

(13,582)

(17,789)

 

 

 

 

Number

Number

 

Number

 

 

 

 

 

 

Weighted average number of ordinary shares used in calculating basic earnings per share

 

150,647,610

 

150,647,610

 

150,647,610

 

 

 

 

 

 

Weighted average number of ordinary shares used in calculating diluted earnings per share

 

150,647,610

 

 

150,647,610

 

150,647,610

 

 

 

Cents

Cents

 

Cents

 

 

 

 

 

 

 

 

Basic earnings per share

 

(0.41)

 

(9.02)

(11.81)

 

Diluted earnings per share

 

(0.41)

 

(9.02)

(11.81)

 

                         

 

 

 

Comment at December 2015

111,499 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period.

 

Comment at June 2015

795,541 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period.

 

Comment at December 2014

466,478 loan shares, 102,210 share options and 684,042 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period.

 

Note 17. Events after the reporting period

 

On 20 November 2015, MySale Group Plc entered into an Asset Sale Deed to acquire the trade and assets of three online consumer retail businesses from Grays eCommerce Group Limited in Australia. The acquisition included a membership database of 6,500,000 members including their key details and email addresses. The acquisition took place on the 31 January 2016 for a purchase price of A$5,200,000. The first tranche payment of A$3,000,000 was paid on 20 November 2015 and as at 31 December 2015 is presented within the other current assets. The second tranche payment of $2,200,000 was deposited into an Escrow Account (note 7) and paid on the 31 January 2016.

 

No other matter or circumstance has arisen since 31 December 2015 that has significantly affected, or may significantly affect the group's operations, the results of those operations, or the group's state of affairs in future financial years.

 

 

 

 

 

 

 


This information is provided by RNS
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