# MySale Group plc Pre-close Update – FY17 growth delivered, momentum into FY18

- Link: https://www.directorstalkinterviews.com/mysale-group-plc-pre-close-update-fy17-growth-delivered-momentum-fy18/412732603
- Published: 2017-07-26T07:18:54+01:00
- Author: Giles Arbor

**MySale Group plc** (LON:MYSL) pre-close trading update confirms strong full year
trading for the group, with improved financial and operational performance delivering
growth. Group revenue increased c.6% to A$268m, while higher margin online revenue,
representing c.90% of the total group, experienced growth of 10% to A$240m. As a
result, gross profit grew 14% to A$76m, underpinned by a 190bp improvement in gross
margin to 28.3%. Management remain focused on running efficient and effective marketing
strategies, with increased emphasis on customer re-engagement and retention, to 
continue to improve core KPIs and drive profitable growth. This has helped deliver
impressive underlying EBITDA growth of c.58% from A$5.5m to A$8.7m, slightly ahead
of our A$8.5m forecast. More detail is expected at the full year results due to 
be reported towards the end of September.

**Management remain confident in outlook, with strong momentum carrying into FY18.**
The company have provided guidance of revenue growth of 15-20% for the year in line
with our 16.0% forecasted, and EBITDA of between A$11.5 – 11.8m (Zeus A$11.5m).

**Strategic partnerships and acquisition progressing as planned, driving growth.**
The strategic partnership with gilt.com, to help scale the group’s retail marketplace
platform that was announced in March, has launched and is progressing as planned.
The integration of Identity Direct, a leading online retailer of personalised products
that was acquired for A$2.7m in April, is progressing well and performing in line
with expectations. A new partnership, with a global online retailer, has also started
in test phase and will open a strong inventory pipeline and expand product selection.

**Overall view.** MySale Group Plc continues to deliver against the management plan
with improved operational and financial performance, and it is particularly encouraging
to see continued growth coupled with a significant improvement in the margin. It
remains our view that there is also possible upside to come from new income streams,
including the budding retail marketplace. MySale is a business that generates substantial
revenues that are currently valued on an EV/Sales multiple of just 1.0x. The e-commerce
peer group trades on an average FY1 EV/Sales multiple of 2.1x. If MySale traded 
on 1.5x it would equate to 178p.

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