MySale : Full Year Trading Update

MySale Group plc

(the "Company", "MySale" or the "Group")

Full Year Trading Update

MySale (AIM: MYSL), a leading international online retailer, today provides a trading update for the 12-month period ended 30 June 2022.

Full year trading update

The Group continues to make good progress in scaling the Group's off-price curated marketplace platform. This is now the Group's largest channel, underpinned by the higher margin own-stock and Order After Sale channels. Active Customers1 grew by 15.4% to 611,000 (FY21: 529,000) leading to Gross Merchandise Value ("GMV")2 increasing 14% to A$142.4m (FY21: A$125.4m). As a result of the growth in the marketplace platform and the associated channel mix, Statutory Revenue3 decreased by 20% to A$94.9m (FY21: A$117.9m).

In-line with the trend in statutory revenues, gross profit decreased by 13% to A$40.2m (FY21: A$46.4m), while

gross margin increased by 298 bp to 42.3% (FY21: 39.4%). Underlying EBITDA4 of A$26k (FY2: 1 A$4.2m) reflects the ongoing impact of changes to sales mix and supply chain volatility throughout the year, partially offset by reduction in cost base.

The Group continues to focus on operational efficiency and this resulted in a cost base reduction of 5% to A$40.2m (FY21: A$42.2m) which was further accelerated in Q4, decreasing by 27% to A$7.3m (Q4 FY21: A$10.0m). As a percentage of GMV, the cost base was 28% (FY21: 34%). Furthermore, marketing spend as a percentage of GMV decreased to 6.5% (FY21: 7.4%) and Customer Acquisition Costs reduced by 28.5% to A$28.40 (FY21: A$39.74). Momentum in the growth of the marketplace resulted in 30-Day Active Suppliers5 increasing by 19% to 604 (FY21:505). Total Active Suppliers6 decreased by 2% to 988 (FY21: 1,007).

Inventory and balance sheet

In H1, the Group invested in own-stock inventory which built to a higher level than expected due to subdued demand. Since then and as a result of management focus, inventory balances have significantly reduced to A$2.9m (FY21: A$5.5m and 1HFY22: A$6.1m).

As at 30 June 2022, the Group had a cash balance of A$3.8m (FY21: A$9.2m). The Group remains bank debt free although has a drawn $1.2m factoring facility.

Outlook

Looking forward, whilst the macro environment remains uncertain, we remain confident in the resilience and fundamentals of our business model and in the competitive advantage we can gain through continued execution of our 'ANZ First' strategy. The Board believes the Group's counter-seasonal proposition continues to resonate with our international partners and whilst there is an excess of global inventory, the costs of international shipping remain challenging.

Whilst the Board continues to take a cautious approach, it believes the long-term outlook remains attractive for MySale to deliver on its ambition to be the leading ANZ off-price curated fashion, beauty and homewares marketplace platform.

Kalman Polak, Chief Executive Officer of MySale, commented:

"We continue to make good operational progress in growing the size of our marketplace platform, both in terms of GMV, which increased by 14%, and supplier numbers. The strategic shift in channel mix towards the platform and away from higher-marginown-stock has impacted revenue and profitability, but we are confident we are pursuing the right strategy for sustainable growth.

"We have made excellent progress in reducing the cost base as we simplify the business and align it to each of our channels. This is reflected in the 27% reduction in Q4 that is anticipated to contribute to a reduction in the cost base that will flow through into the next financial year.

"We have adopted a focused approach to managing the inventory position, with levels now significantly reduced, giving us a stable platform as we move forward and pursue the various opportunities available to the Group."

1. Active Customers are customers who have purchased a product through a MySale website of app in the previous 12 months
2. Gross Merchandise Value (GMV) is the total value of transactions sold by MySale or sellers through the MySale platform and includes the product sale price, delivery charges, less refunds and returns, and excludes GST. GMV differs from revenue for the Marketplace sales channel in that statutory revenue only includes the commission charges by MySale to sellers rather than the total value and other amounts relating to those transactions. GMV is a key operating metric for management as it measures the total value of the sales through MySale's sales channels
3. Revenue earned by MySale from the sale of goods to customers through MySales's sales channels and includes delivery charges, less refunds and returns, excludes GST
4. Underlying EBITDA is calculated as reported EBITDA before impairment losses/reversals related to goodwill and receivables, share-based payments, reorganisation costs, one-off cost and unrealised foreign exchange loss/gain
5. Active Suppliers are brand partners or sellers who sold product to MySale or through a MySale website in the previous 12 months
6. 30-DayActive suppliers are brand partners or sellers who sold product to MySale or through MySale website in the previous 30 days

About MySale

MySale operates a group of leading proprietary ecommerce platforms that offer unparalleled access to brands at great prices. Launched in Australia in 2007, MySale continues to be the go-to destination for hard-to-own fashion and lifestyle items ranging across apparel, shoes, accessories, homewares and lifestyle, beauty, kids and baby and at great prices. Brand partners get unparalleled access to a unique shopping audience, leading marketplace experience and channel for counter seasonal goods.