26th Mar 2019 09:33
LONDON (Alliance News) - MySale Group PLC on Tuesday said earnings in the first half of its current financial year took a hit from changes in the Australian tax legislation for e-commerce import transactions.
The stock was trading 30% lower on Tuesday morning at 12.38 pence a share.
The online retailer reported a 17% decrease in revenue to AUD126 million, about GBP68.1 million, for the six months to the end of 2018 compared to AUD152 million a year prior, with online revenue falling by 13% to AUD120 million.
Pretax loss widened significantly to AUD10.3 million from just AUD125,000 loss reported a year before.
MySale explained that first half results reflect the significant challenges faced within the core Australia and New Zealand market, principally due to the impact of changes to the goods and services tax legislation for e-commerce import transactions of less than AUD1,000.
The company said it has made allowance for some disruption and had plans in place to accommodate this change through a combination of input cost savings, supply chain changes and selective price increases.
In the first quarter of financial 2019, the business traded in line with expectations, MySale said, however in the second quarter - the company's peak trading period - the disruption caused by the tax changes was more acute than anticipated.
In addition to these factors, MySale earnings were affected by the product mix being overweight in categories with lower gross margins.
''Performance during the first half was disappointing, however we took immediate action to address the issues the group faced. The changes to product strategy, while still ongoing, will be completed in the second half of the current financial year and should stabilise revenues and improve gross margin," said Chief Executive Carl Jackson.
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