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Retail club MySale is gaining traction

After a slow start, online retailer MySale is now starting to grow strongly
September 28, 2016

Online members-only retail shopping club MySale (MYSL) made significant progress in the year to June, delivering underlying cash profits of A$5.5m (£3.2m) compared with a A$9.5m loss in the previous year.

IC TIP: Hold at 95p

As part of its strategic plan, the group worked to secure higher lifetime-value customers, while at the same time reducing postage promotions and increasing the proportion of its own-buy inventory. This resulted in an increase in gross margins from 23 per cent to 26 per cent, while total overheads fell from 27 per cent of revenue to 24 per cent. Average revenue per customer rose 9 per cent to A$302, while the average order size was up by a fifth at A$90.

Leading the way were MySale's core markets of Australia and New Zealand, where these strategic changes boosted gross profits by 12 per cent despite exchange rate pressures. The initiatives also helped revenue in Southeast Asia grow by a fifth, with gross margins nearly doubling as the company tailored merchandising, shipping and pricing to suit local customers. Relaunched in the UK under the Cocosa brand, revenue grew strongly from A$4.2m to A$10m on the back of an increasingly active customer base.

Analysts at Zeus Capital are forecasting adjusted pre-tax profits for the year to June 2017 of A$2.3m and EPS of 1.1p (from A$1.4m and 0.7p in FY2016).

MYSALE (MYSL)
ORD PRICE:95pMARKET VALUE:£144m
TOUCH:94.5-95.75p12-MONTH HIGH:97pLOW: 37p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:51A¢*NET CASH:A$27.5m

Year to 30 JunTurnover (A$m)Pre-tax profit (A$m)Earnings per share (¢)Dividend per share (p)
2012**112-8.1-9.9na
2013**1625.84.6na
2014200-62.1-58.3na
2015236-21.5-11.8nil
20162520.2-0.1nil
% change+7---

Ex-div: -

Payment: -

*Includes intangible assets of A$29.8m, or 20¢ a share **Pre-IPO figures and 2013 EPS calculated pro-forma £1=A$1.69