MySale Group Plc (LON:MYSL) has released a positive AGM statement noting a good start to the year with revenue growth continuing at rates similar to that seen in the second half of last year (c.10%) as well as increased EBITDA guidance for the full year. As expected gross margin is substantially improved, while investment continues in the technology platform in terms of data and analytics which is expected to drive further improvements in marketing efficiency.
- Focussed strategy on the core ANZ markets continues to pay off. At the finals in September the company gave positive indications on KPIs that were boosted by a greater focus on engaged customers with higher lifetime value, as well as re-activating the membership base in ANZ that helped deliver performance ahead of expectations. The company has continued to direct more marketing spend in the core ANZ region on re-engagement with inactive members that has successfully reduced Cost Per Activation (CPA).
- Nudging up forecasts in line with guidance. As a result of reduced CPA costs and in line with guidance our FY17 EBITDA forecast increases from A$8.3m to A$8.5m, and our adj. EPS from 1.1c to 1.2c. No change to FY18 at this stage. The next major news will be the interims that are expected towards the end of February and as per prior year we expect there to be a second half weighting.
- Overall view. MySale Group Plc continues to deliver against the management plan with improved operational performance, and it is particularly encouraging to see continued growth coupled with a significant improvement in the margin. We note there is also possible upside to come from new income streams including the Sports Direct partnership and retail marketplace in the core ANZ region. With a current market cap of £142m and a solid cash position of A$34m (c.£20m) at the year end, the business should continue to re-rate as forecasts are achieved and the business delivers on its growth plan alongside the benefit of operational leverage.