Making improvements to your business comes at a price, evidenced by recent numbers from members-only, online shopping club MySale (MYSL). During the last financial year, the group updated its technology platform to allow for wider availability and greater variability of products, in turn doubling capital expenditure to A$8.5m and reducing the net cash balance. It also led to higher operating expenses as the group took on more staff, and continued to spend around 7 per cent of revenues on marketing to new and existing customers. Together with a A$1.4m loss on foreign exchange, reported pre-tax profits took a nose dive. Exclude certain one-off non-cash costs however, and underlying pre-tax profits more than tripled to $A3.3m.
Those investments appear to be well timed: online revenues rose 10 per cent last year to A$238m, driven by a growing active customer base. Together with improved gross margins and a close eye on costs, underlying cash profits (which exclude interest expenses and depreciation and amortisation charges) also rose 59 per cent to A$8.7m.
Analysts at N+1 Singer expect pre-tax profits of A$5.3m for the year ending June 2018, giving EPS of 2.4¢, compared to A$3.3m and 2.5¢ in FY2017.
| MYSALE (MYSL) | ||||
| ORD PRICE: | 111p | MARKET VALUE: | £ 168m | |
| TOUCH: | 109-111p | 12-MONTH HIGH: | 133p | LOW: 73p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 50A¢* | NET DEBT: | A$8.9m | |
| Year to 30 June | Turnover (A$m) | Pre-tax profit (A$m) | Earnings per share (¢) | Dividend per share (¢) |
| 2013 | 162 | 5.8 | 4.6 | na |
| 2014 | 200 | -62.1 | -58.3 | na |
| 2015 | 236 | -21.5 | -11.8 | nil |
| 2016 | 252 | 0.2 | -0.1 | nil |
| 2017 | 268 | -1.6 | -0.7 | nil |
| % change | +6 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of A$35.6m or 24¢ a share £1=A$1.71 | ||||
