MySale Group issues profit warning following challenging Q2

The MySale Group Plc has said that in the second quarter, the peak trading period, the ongoing disruption caused by the legislative changes has been more acute than anticipated and there has been a negative impact on the group’s revenue and particularly gross profit. The board currently expects the outcome of FY19 to be significantly below market expectations, with a small underlying EBITDA loss in the first half. However it is anticipated that the measures taken to reduce costs and improve margins will result in significantly improved performance in the second half of the year, delivering a small underlying EBITDA profit for the full year.

Commenting on the trading update, Carl Jackson, the company’s CEO said in a statement: “We are very disappointed in the performance during this year’s peak trading period. Whilst we are experiencing a short term dip in revenue and profitability we anticipate the actions initiated shall deliver a return to growth in underlying EBITDA in the second half of the current year.”

MySale Group reports decline in Q2 revenue and profit

The company added that revenue was adversely affected by selective price increases, which have now been reversed, reducing transaction volumes as price competition and comparison increased. This together with the product mix resulted in higher levels of discounting and postage promotions being deployed in order to mitigate lower demand.

The company further said that actions are being taken to restore revenue and gross margin including; changes to the product mix to remove lower priced goods in certain categories; increase the weighting of higher price-point categories and products; locating all own-buy inventory in local facilities; sourcing more inventory from the domestic market; and reducing freight costs by centralising inventory.