Boohoo trading partner warns it could suspend dealing in its shares next month
Beauty products business, Revolution Beauty Group, warned it will suspend trading in its shares from September 1, if it is unable to publish its annual results by August 30.
The Kent-based retailer, which Manchester online business boohoo pledged this week to become its “supportive stakeholder and long term partner”, is currently the subject of an ongoing audit for the year ended February 28, 2022, regarding accounting issues.
It announced, on August 2, that it intended to publish its accounts on August 30, explaining: “This is due to additional time required to complete the company’s audit. Management is not aware of any material issues that have been raised by the auditors during the audit process to date.”
It said the annual report would be sent to shareholders and made available on its website on August 31.
However, today (August 19), the group provided an update to the stock exchange, which said: “Following further discussions with the group’s auditors, and based on its best estimate of the time required to complete the audit from this point, the company has now concluded that it does not expect to be able to release audited results for FY22 by 31 August 2022.
“In the event that the group’s audited FY22 results are not published by 31 August 2022, trading in the company’s shares will be suspended with effect from 1 September 2022 until such time as the audited results are released.”
The company said it will provide further updates as appropriate.
Two days ago boohoo announced it had taken a 7.1% stake in Revolution Beauty.
It said: “The investment builds upon the existing relationship between boohoo and Revolution Beauty, under which Revolution Beauty products are sold through several of the group’s direct to consumer brand websites and its online digital department store, Debenhams.
“The investment reflects boohoo’s belief in the growth potential of Revolution Beauty and it intends to be a supportive stakeholder and long term partner.”
Commenting on the investment, Danni Hewson, financial analyst at Manchester investment platform, AJ Bell, said: “Boohoo might be facing slowing demand as its customers battle the cost-of-living crisis, yet that hasn’t stopped it taking a strategic stake in troubled make-up seller Revolution Beauty. The target recently ran into problems with its auditors over accounting issues, causing the share price to collapse.
“While we still don’t know the outcome of this probe, boohoo clearly didn’t want to put an opportunity to waste and has bought 7.1% of the business while the shares were going cheap.
“Boohoo bought assets from Debenhams last year as part of a plan to be a bigger player in the beauty products industry. Owning a slice of Revolution Beauty could speed up this strategy, particularly if it uses its status as a large shareholder to get good deals on product supply.”
