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MySale no bargain

Flash sales business MySale has had a turbulent start to life as a listed company
March 2, 2015

Retail tycoons Sir Philip Green and Mike Ashley can't be pleased with the direction MySale (MYSL) has taken since its shares floated on the junior market last June at 226p. Sir Philip indirectly owns 22 per cent and Mr Ashley's Sports Direct (SPD) 4.8 per cent of the flash sales company, which has lost more than three-quarters of its value since the summer.

IC TIP: Sell at 50p

Even the initial listing got off to a shaky start after the shares were mistakenly priced at 2.26p rather than 226p. Fast forward to December and they tumbled after the group warned that pre-tax profit for the full year would come in "materially below market expectations". That followed challenging trading conditions in its home markets of Australia and New Zealand, where sales growth slowed to 3 per cent in the first half - well short of initial guidance. Management has pulled out of South Korea and the US, too, because its websites in the countries were not cost-effective. House broker Zeus Capital now expects MySale to make a full-year pre-tax loss of $7.7m, compared with a $2.3m loss the year before.

Membership numbers are growing, but that has come at great marketing expense. In South Asia, for example, sales rose 29 per cent in the first six months, but profit fell 43 per cent to $1.3m. However, management says "actions taken in December" have already had a positive impact.

MYSALE (MYSL)
ORD PRICE:50pMARKET VALUE:£75.3m
TOUCH:50-51p12-MONTH HIGH:239pLOW: 50p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:53¢*NET CASH:$59.2m

Half-year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2013**114.6-18.3-19.1nil
2014123.3-18.4-9.0nil
% change+8---

Ex-div: na

Payment: na

*Includes intangible assets of A$22.5m, or 15¢ a share

**Pre-IPO figures

£1=A$1.97