Revolution Beauty’s ‘solid’ performance as boardroom changes take effect
Revolution Beauty Group has announced its full year 2023 results, and a boardroom shake-up, linked to a settlement with its key stakeholder, boohoo, announced last month.
The online beauty products retailer reported better revenues, and reduced losses, for the year to February 28, 2023.
Sales of £187.8m were an improvement on the previous year’s £184.6m level, while a pre-tax loss of £33.9m was an improvement on the previous year’s loss of £45.9m.
Net debt, however, rose from £8.4m in 2022 to £21m.
This March the group announced it had secured an amended facility agreement with its banking partners which runs through to October 2024. The overall size of the facility was agreed at £32m, reduced from £40m, and is fully drawn.
The group has a cash balance of £10.5m.
No dividend is recommended and the group said it does not envisage paying dividends in the foreseeable future, and intends to re-invest surplus funds in the development of the business.
Revolution said momentum from the second half of the reporting period has continued and it is now performing ahead of internal expectations.
Sales in the first quarter of fiscal year 2024 increased by 60% on the prior year, when sales were particularly weak due to customers previously overstocking.
The board said, while it is mindful of the external environment, it remains confident in the future opportunities open to Revolution Beauty, given its relevant, affordable and multichannel offer.
As previously disclosed, the current expectation for FY24 is high single digit growth in revenue, and adjusted EBITDA in the high single digit millions.
In September last year Revolution’s shares were suspended on AIM linked to an audit of the 2022 results, regarding accounting issues. Trading was resumed this February.
Last August Manchester-based online fashion retailer, boohoo, pledged to become a “supportive stakeholder and long term partner” in Revolution after taking a 7.1% stake in the business.
Boohoo, which now owns 27.1% of Revolution’s shares, subsequently launched a boardroom coup this June, demanding the removal of chief executive Bob Holt, non-executive director Derek Zissman, and chief financial officer, Elizabeth Lake.
It proposed the appointment of boohoo non-executive directors Alistair McGeorge – who previously led Liverpool-based retailers Littlewoods and Matalan – and Neil Catto as Revolution directors.
After a very public spat, the two businesses reached a settlement in July concerning boardroom departures and appointments.
Today, alongside the annual results, the board changes were confirmed.
Lauren Brindley has replaced Holt as CEO, effective from September 18, while Alistair McGeorge moves to the role of non-executive chairman.
Alistair McGeorge said: “We are pleased that Lauren will be joining Revolution Beauty at such a critical and exciting time for the group. 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.
“I would also like to thank Bob Holt for his contribution during his time as CEO. His work in introducing new protocols across the business and overseeing the lifting of the suspension in trading of the group’s shares means that we are in a good position to pursue the next stage of growth.”
Brindley said: “I’m thrilled to be joining Revolution Beauty at such a pivotal moment for the group. Revolution Beauty is recognised as one of the fastest product innovators in the sector and the brand has already proven it has global potential.”
Meanwhile, Colin Henry and Chris Fry have joined as independent non-executive directors. They will replace Jeremy Schwartz, Rachel Maguire and Matthew Eatough.
Alistair McGeorge, said: “Colin and Chris both bring with them highly relevant experience that will benefit the group and its future. I am very pleased to welcome them to the board. I would also like to take this opportunity to thank Jeremy, Matthew and Rachel for their contribution to the business.”
Presenting today’s annual results, Bob Holt said: “I am proud of what has been achieved under my short tenure and take satisfaction from achieving what I was brought in to achieve, the stabilisation of the business and the lifting of the share suspension.
“The business is poised for the next stage of its growth story, and I wish Alistair and the rest of the team well as they take the business to the next level.”
Mr McGeorge described today’s annual results as a “solid group trading performance” which he added has been achieved “during a period of well-publicised upheaval for the business”.
He said: “To that end, I would like to thank my predecessor Derek Zissman, Bob Holt and Elizabeth Lake for their efforts over the past 12 months. Firstly in maintaining the commercial performance of the group while also overseeing the implementation of new internal protocols and the lifting of the suspension of the group’s shares which are traded on AIM.
“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.
“While there is still a lot of work to be done, I look forward to supporting our new CEO, to build on recent momentum within the business, and achieve long term sustainable growth within what is a large and attractive beauty market.”
The Financial Conduct Authority announced on July 21 that it had started an investigation into potential breaches of the Market Abuse Regulation in relation to certain matters in the period from July 2021 to September 2022.
Mr McGeorge said Revolution Beauty is cooperating fully with the FCA and will provide updates in due course.
