Australian e-tailer MySale returns to profit following restructuring

Australian online retailer MySale has returned to profitability in the first half of the year following its restructuring to an “inventory light market place platform” focused on the ANZ market.

For the six months to December 31 2020, the company reported EBITDA of 2.5 million Australian dollars, compared to a loss of 3.1 million Australian dollars in the prior-year period and ahead of management’s expectations.

“We have made excellent progress in the last six months reflected by the successful ongoing execution of our ANZ First Strategy, which is flowing through into the financial results,” said MySale CEO Carl Jackson in a statement.

Group total revenue decreased by 11 percent to 63.8 million Australian dollars in the period, but core revenue - which excludes the sale of legacy stock - increased by 15 percent to 61.3 million Australian dollars.

MySale returns to H1 profit, upbeat on current trading

The retailer’s gross margins continued to improve in the period, increasing to 38 percent compared to 34 percent a year earlier.

In 2019, MySale launched a restructuring strategy that saw it close its UK and US operations and sell the trade and assets of its shopping platform Cocosa.co.uk to fashion retailer Brandalley for 1.5 million pounds.

The restructuring also saw brand partners relaunching on the group’s “inventory-light marketplace platform” where the group says they could benefit from its “counter-seasonal proposition”.

MySale chair Charles Butler said: “A key area of the restructure has been to focus on better quality revenue, which has meant being much stricter on which third-party sellers can trade on the platform and being more selective over what stock is purchased.

“This in turn has led to better quality products on the website and a significant improvement in customer satisfaction scoring, which should lead to improved customer retention and repeat purchase rates going forward. From a financial perspective, this has led to a 12 percent improvement in gross margin to 38 percent.”

MySale said trading for the first two months of the third quarter has continued to be profitable, with core revenue and gross profit “significantly ahead of the prior year, underpinned by robust margins and a right sized, more flexible cost base”.

The board expects group revenue for the year to June 30 2021 to be in line with previous guidance, with group underlying EBITDA expected to be “significantly” ahead of market expectations.

Image: MySale, Facebook