23rd Sep 2022 12:21
(Alliance News) - Revolution Beauty Group PLC on Friday said that its auditor BDO LLP has identified a "number of serious concerns" regarding its audit for the 2022 financial year.
Revolution Beauty is an AIM-listed beauty products retailer. Trading in the company's shares has been suspended since September 1 after it failed to deliver its first audit by August 31 after floating in July 2021.
BDO said that it had concerns about whether Revolution Beauty's audit evidence was "sufficient and accurate" regarding a number of key audit areas. BDO also questioned "the validity of certain commercial arrangements entered into by the company."
BDO concluded that it is not able to sign an audit report with regards to the 2022 financial year. It recommended that Revolution Beauty appoint independent external advisers to conduct an investigation.
As a result, the company appointed on Friday Macfarlanes LLP and Forensic Risk Alliance to being an independent investigation. It also formed an investigation committee of Derek Zissman, a non-executive director, and Elizabeth Lake, chief financial officer since June 2022. No timeline was issued for the investigation, although it may take "several months" to complete.
Zissman said: "We are taking BDO's concerns very seriously and will conduct a full and independent investigation. We will continue to keep investors and stakeholders fully updated as the process continues."
Revolution Beauty said that although it had entered its seasonally stronger half of the year, macroeconomic headwinds meant it expects its results for 2023 to be "materially below market expectations".
As at September 21, the company had net debt of GBP16.1 million and a GBP40 million revolving credit facility which provides "sufficient liquidity" for the group's current requirements.
By Chris Dorrell; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Revolution Beauty