HomeBlogFinanceRevolution Beauty shares to be suspended as results miss deadline

Revolution Beauty shares to be suspended as results miss deadline

Revolution Beauty said its shares would be suspended after the UK online retailer confirmed it would not file audited accounts by the end of the month, capping a calamitous first year as a public company.

The group, whose shares have collapsed almost 90 per cent since it floated in July 2021 on London’s Aim, said it aimed to complete the audit and publish its annual report “within a matter of weeks”.

The initial public offering was one of the biggest on AIM last year as the group, which sells beauty products online as well as through collaborations with chains such as Superdrug and Boots in the UK and Ulta in the US, attracted investors with a promise of capitalising on consumers’ shift to online shopping.

Online fashion retailer Boohoo recently increased its stake in Revolution Beauty from below 3 per cent to about 12 per cent, making it the third-largest shareholder behind co-founders Adam Minto and Tom Allsworth.

Revolution Beauty said on August 2 that there were no major financial concerns behind the delay in filing, but nine days later disclosed that its auditor, BDO, had raised “certain accounting issues” that could have a “material impact” on the results.

It cautioned on August 11 that “group profitability for 2022 could be materially reduced” because of potential adjustments, including stock, bad debts and revenue recognition.

Revolution Beauty’s shares will be suspended from September. The company said it expected its shares to begin trading again when it does file audited results for the 12 months to the end of February.

BDO declined to comment.

Revolution had previously warned that destocking by key retail partners, rising freight and raw material costs, and the cessation of sales in Russia and Ukraine would hurt sales and profits this year.

The group changed its finance director, with Elizabeth Lake replacing Andrew Clark who left to “take some time out ahead of taking on a new challenge”.

Boohoo said the decision to increase its stake, which was made before the latest disclosures about accounting issues, reflected its belief in the potential of Revolution Beauty, even as traditional asset managers such as Jupiter and Axa cut their holdings in the company.

Revolution Beauty already sells products on Boohoo’s website and Manchester-based Zeus Capital is joint nominated adviser to both groups. Boohoo declined to comment.

Revolution also has links to ecommerce group THG, using its Ingenuity fulfilment platform for direct sales to consumers outside the UK.

Minto, who co-founded Revolution in 2014, said at THG’s capital markets day in October last year that the partnership had transformed its ability to serve markets such as the US and Australia.

Revolution Beauty is one of several UK ecommerce groups whose shares have plunged since going public in London last year.

Shares in online homewares retailer Made.com have tumbled more than 90 per cent, while plumbers’ merchant Victorian Plumbing and second-hand marketplace MusicMagpie have both lost more than four-fifths.

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