Cosmetics giant Revolution Beauty crumbled on Thursday after a chilly reception to full-year financial results and news on the appointment of a new chief executive.
At 28.35p per share, the Revolution share price was 17.2% lower on the day.
Rebvolution said that revenues rose 1.7% during the 12 months to February 2023, to £187.8 million. Group sales were driven by an 8.1% increase in store turnover following the end of Covid-19 lockdowns.
However, online sales at the Alternative Investment Market (AIM) business dropped 12.1% over the period.
Revolution reported a pre-tax loss of £33.9 million for the year, though this was an improvement from the £45.9 million loss recorded previously.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) remained negative at £7.5 million. This was larger than the £800,000 loss recorded in fiscal 2022, it said, and was due to lower sales and higher marketing and employee costs during the first half.
Net debt ballooned to £21 million last year from £8.4 million during the 12 months.
New CEO Announced
Revolution noted that “the group delivered a resilient performance during the period, despite continuing to be impacted by previously flagged issues identified around stock, revenue and the carrying value of Revolution Labs.”
The firm added that “nonetheless, trading improved as the year progressed, with the return of top line revenue growth and positive EBITDA in the second half.” It said that “this follows operational and commercial changes made by the new management team.”
For the current financial year, the cosmetics company said that “trading has continued to perform ahead of expectations.” It had previously announced a 60% uplift in year-on-year sales between March and June.
Revolution also announced the appointment of Lauren Brindley as new company chief executive. The former vice president for beauty and personal care at Walgreens will replace the outgoing Bob Holt on 18 September.
Executive chairman Alistair McGeorge said that “Lauren’s extensive knowledge of the beauty and retail industries, and proven track record of driving meaningful results, will be critical as we build Revolution Beauty into a global beauty leader.”
On The Up?
Commenting on last years results, McGeorge said that “this solid group trading performance has been achieved during a period of well-publicised upheaval for the business.”
He said that “while I have only been with Revolution Beauty for a short period, it is clear to me that the business has the right attributes in place. The expertise of colleagues, combined with the relevance, affordability and strength of the Revolution brand gives me confidence that we can achieve continued growth across our core markets.”
In a turbulent period for the business, Revolution had its shares suspended on the London Stock Exchange for 10 months to June. This was due to accounting problems related to its financial 2022 results.
There was further strife when e-retailer and major shareholder Boohoo demanded the resignation of chief executive Bob Holt, chairman Derek Zissman and chief financial officer Elizabeth Lake. Both Zissman and Holt agreed to step down in July.
Russel Pointon, director of content, consumer and media at Edison Group, commented that “despite ongoing challenges, the group’s £10.5 million solid cash balance, appointment of a new CEO with a strong background in the industry, and optimistic outlook for high single-digit growth in revenue and a move to positive adjusted EBITDA offer encouraging signals for potential investors.”
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