Preliminary Results

Opportunities ahead for reorganised and recapitalised business

MySale Group plc (AIM: MYSL) ('the "Group''), the leading international online retailer, is pleased to announce its audited preliminary results for the year to 30 June 2019.

Commenting on the results, Carl Jackson, Chief Executive Officer; said:

"It has been a difficult year for MySale during which we faced a series of significant challenges which resulted in a disappointing financial performance for the Group. We have now implemented the necessary changes to rebuild from a strengthened platform.

"Crucially, we have simplified our business model and made major changes that have allowed us to accelerate our 'ANZ First' strategy, not least by exiting a number of territories where we previously operated. We have also taken steps to accelerate the business towards an Inventory Light Marketplace Platform, which provides a compelling sales channel for our domestic and international brand partners, particularly through its counter-seasonal and clearance solutions.

"With a new organisational structure, an improved business model and operating on a debt free basis, the Group is now primed to deliver value moving forwards."

Offering unique solutions for our brand partners

"Retail Convergence has been working with MySale since 2017. They provide us with a seamless solution, via their marketplace platform, to sell into Australia, New Zealand and SE Asia allowing us to maximize the counter seasonal opportunities by accessing their large off-price ANZ customer base." - Retail Convergence Inc.

Decisive actions taken

·; Developed and commenced the execution of the ANZ First Strategy

·; Pivoted the business to an Inventory Light Marketplace Platform that is counter seasonal to the Northern hemisphere and attractive to many brands

·; Relocation of all own-buy (1P) inventory to Australia accelerating the exit of own-buy inventory.

·; After a detailed review of the remaining own-buy and outlet stock, A$18.9 million of write-downs and provisions have been included as an exceptional item in the accounts

·; Disposal of UK websites and closure of warehouse and London office

·; Closure of the US warehouse and office

·; Restructured our international supply chain, simplifying processes providing suppliers with low cost solutions

·; Reduction in headcount to 176 Full Time Equivalents ('FTEs') at 30 Sep 2019 (FY18: 393 at 30 Jun 2018)

·; The wholesale business receivables still remaining at the end of FY19 were reviewed and an A$6.8 million impairment has been included as an exceptional item in the accounts

Technology highlights

·; Delivered benefits following investment in FY17 and FY18 in the accelerated market-place platform allowing for reduced overall investment in FY19 to A$4.9 million, with future reductions expected in FY20

·; New features to accelerate supplier on-boarding, including supplier self-service functionality

·; Capturing more data about our customers and insights from our suppliers providing an improved search and recommendation experience

·; Mobile now sits at the heart of customer interactions, representing 65% of orders in FY19

Post financial year end

·; Raised A$23.3 million to repay and restructure existing bank facilities, leaving the Group cash positive and debt free in September 2019

·; The Group now operates a negative working capital model through an inventory light strategy

·; Closure of The Philippines and Thailand websites

·; Increased the number of suppliers by 44% in Q1 FY20

·; Two new highly experienced independent non-executive directors added to the board

Outlook

·; Exit from the UK business, along with the full deployment of our technology platform, will bring significant cost savings and cash levels will grow as we exit own-buy (1P) inventory

·; Good progress made since completion of the strategic review

·; Trading to date in the current financial year has been in line with management expectations

1Due to the large restructuring the business went through in FY19 management believe the best way for a reader of the accounts to understand the position of the business is for the profit and loss statement to be shown before exceptional items and not on a statutory basis.

2Underlying: is the Group's EBITDA, profit after tax expense or earnings per share calculated having excluded certain expenditure of a one-off, non-trading or non-cash nature in order to allow clearer understanding of the underlying performance of the year. Full details are contained within Note 7 to the financial statements. EBITDA: earnings before interest, taxation, depreciation and amortisation.

Enquiries:

Chairman's statement

There is no doubt FY19 was a difficult year for the MySale business, however, I am confident that after raising GBP£12.8 million (A$23.3 million) of new equity, paying off all bank debt and simplifying the business model, the Company has built a much stronger platform and is now on a firm footing from which it can return to profitable growth.

The problems the Company began with the market disruption caused by the change in Australian GST legislation and were exacerbated by having too much owned inventory, too much of which was in the wrong location.

The board took decisive action which included closing down its US and UK operations, significantly reducing its cost base and refocusing the business on becoming an Inventory Light Marketplace Platform, distributing third party domestic and international inventory to its core ANZ customer base.

The new, simplified business model does not involve buying inventory to sell on the Group's websites and the Company continues to sell down all existing own buy inventory whilst it accelerates the strategic shift to a pure play third party platform. We believe there is a huge opportunity to harness our highly flexible, scalable proprietary technology and customer base to provide an unparalleled solution for both domestic and international brands to clear their inventory in the ANZ market.

Since the year end we have strengthened the board with the addition of two new Non-executive Directors. Dow Famulak brings decades of international big brand relationships with his most recent role being a Plc executive at Global Brands Group. Wally Muhieddine is Managing Partner at Advertising Advantage, a leading Australian media buying and planning agency. I look forward to working with them both and also want to thank David Mortimer, one of our non-executive directors who has served on the board since the IPO and has decided not to stand for re-election at the AGM. We continue our search for the right CFO and will update the market when we have concluded that search.

We could not have reached this point without the significant support shown by our shareholders and lenders along with the hard work and determination of our staff for which I am very grateful. We now have a clear strategy, strong brand partners and a highly focussed team through which to deliver future shareholder value.

_____________________________

Charles Butler

Chairman

4 December 2019

Review of operations by the Chief Executive Officer

MySale experienced a difficult year resulting in a disappointing financial performance, however, it was also a year of significant change. We have simplified our business model and made major changes that allow us to accelerate the ANZ First Strategy underpinned by our Inventory Light Marketplace Platform.

The performance was primarily due to the disruption caused by the changes in GST in Australia amplified by the business being overly focused on expanding in the UK and increasing its investment in own-buy (1P) inventory. This is in contrast to the new ANZ First strategy which is centered around an Inventory Light Marketplace Platform for international and domestic brands.

In light of the factors outlined above, the Group saw declines in revenue, gross profit and gross margin. Given the significant costs in the year associated with restructuring the business, the Group changed the presentation of its financial statement of profit or loss and other comprehensive income to show these adjustments.

Following a significant period of change, we now have a focused Group with strong fundamental drivers:

·; 782,000 active customers

·; 12 websites

·; Database of 3.5m cumulative buyers

·; 9m product units sold in the year

·; 24.5m registered email subscribers

·; 3.4 [average] orders per buyer

·; $304 annual revenue per active customer

·; 9,700 cumulative brand partners

·; 3.5m followers on social media

·; 7.0m mobile app downloads, with 65% revenue from mobile

The restructuring commenced during FY19 and was completed post year end with a new equity placing of A$23.3 million, completed in September 2019, resulting in the Company being cash positive and debt free. As part of the restructuring process, the following initiatives were undertaken:

·; Disposal of our UK websites and closure of the warehouse and London offices,

·; Closure of the US warehouse and office,

·; Fully exited the wholesale business, A$6.8 million impairment recognized in exceptional items,

·; Relocation of all the inventory to Australia allowing us to exit the own-buy (1P) inventory,

·; Detailed review of the remaining own-buy and outlet stock resulting in A$18.9 million of write-downs,

·; Closure of the Philippines and Thailand websites,

·; Significant reduction in headcount to 176 FTE's at 30 Sep 2019 (FY18: 393 at 30 Jun 2018) and reduction in the cost base,

·; Reduced Ourpay debtor book; and

·; Refocused and relocated the leadership team to Sydney.

It has been a year of transition for the Group, however, despite the disruption the fundamentals of MySale are robust; the addressable markets in ANZ continue to represent substantial opportunities and we have a proprietary scalable platform that is set up for success and capable of delivering huge structural advantages. The priority is to focus the team and execute the ANZ First Strategy.

Cash and Working capital

The Group's net debt was A$17.5 million at the year-end (FY18: A$6.2 million). Subsequent to year end, all loans have been repaid following the share placement of A$23.3 million resulting in a net cash balance of A$6.8 million at 30 October 2019.

As a result of the Group exiting the wholesale business, selling down its own-buy (1P) inventory and operating on a substantially lower cost base it will now operate with negative working capital.

Going forward the Group has the right cost base, aligned to the new simplified business, to ensure future profitability, significantly reducing the Group's inventory risk.

Brands and Strategic Partnerships

We continue to be a leading off-price apparel and home online retail platform in ANZ, offering unique solutions for our brand partners. We are absolutely focused on the fashion and home categories, leveraging the counter seasonal opportunity. There is a significant market opportunity and we are ideally placed to provide Northern hemisphere brands access to the Southern hemisphere markets.

The retail landscape is continually evolving and brands are increasingly recognising the benefits of a more integrated inventory partnership that allows them to accelerate the sell through of their discounted inventory outside of their core business.

Whilst the number of products has decreased on the platform as a result of us exiting own-buy (1P) inventory and restructuring the international supply chain, the immediate emphasis is on developing long term profitable brand partnerships and re-engaging with our international suppliers. We are already making significant progress on increasing the number of active brand partners using the platform which will drive substantial increases in the number of products available to customers.

The solutions we offer our international brand partners clearly differentiate us from our competitors. There are no other ANZ off-price online retailers providing the options we offer international brands to sell their off-price inventory into the region.

The Group's well-established international network, flexible and scalable technology platform and resources in key territories make it an ideal partner for international brands and retailers.

Going forward a large majority of the Group's revenue will come from 3P suppliers, on which the Group does not take any inventory risk.

ANZ First Strategy

Our focus is for MySale to be the leading off-price apparel and home online retail platform in ANZ offering unique solutions for our brand partners. These solutions clearly differentiate us from most major retailers, which we see as a significant advantage and as being extremely difficult for others to replicate. Our new structure allows us to operate an Inventory Light Marketplace Platform offering a large selection and delivering great value to our customers every day through a combination of brand, fashion, price and quality.

We believe MySale is well placed to capitalise on the off-price opportunity and continued shift to online shopping.

We will continue to provide international brands the opportunity to sell excess inventory into the ANZ market. MySale is a low cost, highly efficient marketplace offering a wide selection and delivering great value, through a combination of brand, fashion, price and quality to our customers every day.

During the year, the Group's platform processed over 9 million units underlining the efficient processes and systems that the Group has in place to support brands and serve customers.

We are in a unique position, and we are not aware of other retailers in ANZ which can offer the off-price solutions we provide our partners:

·; Just in Time [JIT]: A unique solution, where our partners list their inventory on our platform and we provide a full warehouse and distribution service shipping direct to the customer.

·; Fulfilled by MySale [FBM]: Our partners store their product in our warehouse on consignment, the MySale team provide a full service including; planning, merchandising and dispatch to customer.

·; Dropship [DS]: Our partner list their inventory on the platform and ships directly to the customer.

We provide solutions to match our supplier needs including a full API integration directly or via our channel integration partners. We have worked with over 1,650 partners in the last 12 months.

"Retail Convergence has been working with MySale since 2017. They provide us with a seamless solution, via their marketplace platform, to sell into Australia, New Zealand and SE Asia allowing us to maximize the counter seasonal opportunities by accessing their large off-price ANZ customer base."

Retail Convergence Inc.

We have closed our UK and US warehouses and made excellent progress in restructuring our international supply chain, simplifying processes and providing our suppliers with flexible low cost direct shipment or cross docking solutions. Our international fixed costs have reduced and we will gain variable cost efficiencies as the business scales.

In Australia we are laying the foundations for reduced future capacity by relocating our distribution centre, allowing us to be more efficient and reduce distribution costs significantly in-line with our Inventory Light Marketplace Platform model.

We launched MySale Marketing Services which includes the commercialisation of the customer database, leveraging our supplier partnerships and increasing the revenue from "Select" - our proprietary delivery subscription product.

The progress we have made towards the new sustainable and profitable strategy means that there has been a significant reduction in the operational cost base, the benefits of which will impact the current financial year and beyond.

The team is absolutely focused on the strategy, which has been fully embraced by everyone.

The UK & South East Asia

The sale of the Group's UK assets (cocosa.co.uk) to Brand Alley for a cash consideration of A$2.7 million was completed on the 3rd May 2019 as part of the rationalisation programme which will increase the Group's focus on the ANZ markets. The Group has also significantly reduced its UK and US cost base with the disposal of its offices and warehouses and the offshoring of its back office buying and support functions.

Despite selling the UK website, the UK and US remain very important regions for sourcing product to sell on our platform. Looking forward, we will retain and grow our UK and US business development and account management teams and operate with 3rd party logistics partners.

We have been in SE Asia since 2010 and have always operated retail websites, leveraging ANZ's infastructure. We have now closed the Philipinnes and Thailand websites as they were unprofitable.

Although the SE Asia business currently has less scale than ANZ, the substantial addressable population, increasing disposable income, lack of off-price competition and high mobile penetration in the region provide significant further growth opportunity for the group given its strong value, branded sales offer and exceptional mobile commerce capability.

With increased investment from FY21 and beyond, we are confident that we are positioning SE Asia to capture a significant long term opportunity as we grow the active base and provide the local customer base access to US, UK and European Brands.

Technology Development

We are seeing the benefits of the accelerated technology investment in FY17 and FY18 and remain confident that it will improve MySale's revenue and profitability and result in growth in shareholder value over time.

We have reduced our overall investment in technology in FY19 to A$4.9 million (FY18: A$8.5 million) and will continue to reduce this investment in FY20 ensuring we focus it into high ROI initiatives. We have built a high performing, highly scalable platform designed for third party suppliers that we will be able to monetise more quickly than we have done in the past. Despite the reduction in investment we continue to make exceptional progress with a record number of platform releases, averaging over 1000 per month.

We will continue to prioritise the technology investment into three main areas:

·; Acceleration of the supplier on boarding process and fully developing the self-managed solution;

·; Capturing more data about our customers and insights for our suppliers; and

·; Delivering the best and most relevant user experience.

In FY17 we launched our proprietary programme, 'Ourpay', a 'buy-now, pay-later' platform which allows customers easy budgeting and seamless integration with their shopping journey. This instalment payment option helps customers manage their finances and has been shown to increase both spend and shopping frequency. 'Ourpay' has proved popular with more than 194,000 customers using the product since its launch.

At its peak, 'Ourpay' captured 23% of orders absorbing A$5.4 million of working capital. As part of the strategic review we unwound the working capital and migrated a proportion of the existing 'Ourpay' customers onto other payment partners. We are currently offering 'Ourpay' to our existing customers and are still committed to the development of 'Ourpay' as the Group's proprietary buy-now, pay later platform. At the year end the receivables balance associated with 'Ourpay' was A$2.0 million which we anticipate will further reduce in H1 FY20.

We have built a platform capable of significant scale and moving forward we anticipate that our technology platform will be key to unlocking further operational efficiencies and reducing costs.

Outlook

After a challenging year, we are now in a much stronger position, with a substantially different business that is now based on an Inventory Light Marketplace Platform. Additionally, the Group is now debt free and cash flow positive.

During FY19 we worked with over 1,650 suppliers, who sold over 9 million units on the marketplace platform launching over 34,000 sales campaigns. The scale of our international supplier base gives us the confidence and belief that MySale is well placed to capitalise on the off-price opportunity and the continued shift to online shopping will allow us to build on our solid foundations, scale and capability.

FY20 is about recovery and stability with a relentless focus on execution and we are fully prepared for the change in the NZ GST regulation from the 1st December. We expect revenues to be at a substantially lower level year on year as a result of exiting the UK business and selling down the own-buy (1P) inventory. We anticipate, however, that this, along with the full deployment of our technology platform, will bring significant cost savings and our cash levels will grow as we exit own-buy (1P) inventory.

While it is early in the current year, I am pleased with the progress that we are making since the completion of the strategic review and the refocusing of the business. Trading to date has been in line with management expectations and the board expects that underlying EBITDA and revenue for the year will be in line with management forecasts.

Board of Directors

Jamie Jackson stepped down as Executive Vice Chairman in September. Jamie founded the business and has been instrumental in taking the business to where it is today. I would like to thank him for his contribution, and accomplishments, over a significant period.

Charles Butler, currently Interim non-executive Chairman, will become Chairman on a permanent basis on the signing of this report. Charles oversaw the recent share placing, debt restructuring and strategy repositioning and I am delighted that Charles will be taking on the role of permanent Chairman and will continue to chair the audit committee.

David Mortimer has indicated he will not offer himself for re-election at this year's AGM. We thank him for his contribution over the past five years.

We are delighted to welcome Dow Famulak and Wally Muhieddine as newly appointed Non-executive Directors. Dow was appointed on the 3 December 2019 and is a member of the audit and risk committee and will chair the remuneration committee. Wally was appointed on the 3 December 2019 and is a member of the remuneration Committee. We very much look forward to working with Dow and Wally as we as execute the ANZ First Strategy.

We are also committed to finding the right candidate to fill the CFO position and continues to conduct an extensive search process to fill this role.

These are very important appointments and show our determination to attract the best senior talent to support our business. We are also making changes to our management ensuring we strengthen the team with external talent as well as ensuring we fully utilise our ANZ resources.

I would like to thank the MySale team for all their hard work, energy and passion in what has been a challenging environment. They have been fantastic and the majority are now based in Australia and working more efficiently, quickly and collaboratively. We are keeping it very simple, doing what we know best at speed and with no distractions.

Finally, thank you to our customers, shareholders, suppliers and business partners for their ongoing support and engagement over the past 12 months and we look forward to working with you all in FY20.

_______________________

Carl Jackson

Chief Executive Officer

4 December 2019

Financial review by the Chief Executive Officer

During FY19 as part of the Group's restructuring, the business undertook a detailed review of stock levels and business processes. As part of this review management identified system and process errors that have required the prior year balances to be restated. Full details are contained with Note 4 to the financial statements. The restructuring of the business led to a large number of provisions and write-downs as well as a larger than normal number of one-off costs. This has led management to believe that the best way for a reader of the accounts to understand the position of the business is for the profit and loss statement to be split out into 3 columns for each financial year. The exceptional items are covered in more detail in Note 10 to the financial statements.

Revenue and Gross Profit

For the year ended 30 June 2019 Group revenue decreased by 28.6% to A$208.6 million (FY18: A$292.2 million) and gross profit decreased before exceptional items, by 54.3%, to A$38.2 million (FY18: A$83.7 million). This performance came as a result of the GST changes in Australia and the disruption from the restructuring of the business.

Operating Expenses

The operating expenses before exceptional items dropped to A$59.3 million (FY18: A$74.3 million) in the year. During the year the Group closed the UK and US operations that resulted in a reduction in total operating costs.

Profit/Loss before Tax

The loss before tax before exceptional items for the year is A$26.3 million (FY18: A$2.9 million profit). The reported loss before tax for the year is A$58.2 million (FY18: A$3.7 million loss). This reported loss is after the inclusion of a number of one-off and non-cash items which are shown in more detail below and in Notes 7 and 10 to the financial statements in order to provide greater insight as to the underlying profitability of the Group.

Profit/Loss after Tax and earnings per share

The loss after tax before exceptional items for the year is A$28.7 million (FY18: A$7.1 million profit) and the reported loss after tax for the year is A$69.3 million (FY18: A$1.5 million loss). This reported loss is after the inclusion of a number of one-off and non-cash items which are shown in more detail below and in Notes 7 and 10 to the financial statements in order to provide greater insight as to the underlying profitability of the Group.

Note 38 shows the detailed calculations of basic loss per share for the financial year (after tax and before exceptional items which was 18.60 cents per share loss (FY18: 4.61 cents profit) and was 12.21 cents loss (FY18: 6.30 cents profit) on EBITDA before exceptional items.

Taxation

The Group has recorded a tax expense of A$11.1 million for the year (FY18: A$2.2 million benefit) which includes an impairment to the deferred tax asset of A$10.6 million. Full details of the tax expense are provided in Note 11 to the financial statements. The Group has A$83.9 million (FY18: A$32.4 million) of carried forward tax losses that may be available to use for future offset. A deferred tax asset is only recorded where it is probable that these losses will be recoverable. The business needs to undertake a full review of the impact of the capital restructuring to understand the extent to which this restructure could put the accessibility of these tax losses at risk. Until this review is completed management have taken the judgement of not recognising these losses as a deferred tax asset.

Balance Sheet, Cash and Working Capital

The Group's closing cash balance was A$0.8 million (FY18: A$6.8 million) and a net debt balance of A$17.5 million (FY18: A$6.2 million). As detailed in the subsequent events note, the Group finalised a share placement of 640.4 million shares for A$23.3 million in September 2019. The placement involved a repayment of borrowings of A$10.9 million and debt forgiveness of A$7.7 million. After these actions the business is debt free.

As noted in last year's financials the strategy was to reduce wholesale activity to deliver a steady reduction in gross trade receivables. Trade receivables reduced to A$11.3 million (FY18: A$29.8 million). The balance includes uncleared cash receipts from online customers of A$5.3 million (FY18: A$5.0 million). There has been a provision raised against the trade receivable balances of A$5.4 million (FY18: A$0.3 million) which includes a provision against Ourpay receivables of A$1.4 million and a provision against wholesale debtors of A$4.0 million. Further details are provided in Note 13 to the financial statements.

Capital expenditure was reduced on prior year investment levels as the technology platform is maturing and requiring less major development work than was undertaken in FY17 and 18. Total capital expenditure was A$4.9 million (FY18: A$8.5 million). Goodwill was impaired by A$2.8 million to A$21.2 million. No impairment was considered necessary to the other intangible assets.

Inventory value was recognised at the year end as A$16.0 million (FY18: A$33.7 million). The balance includes stock in transit of A$1.7 million (FY18: A$2.7 million) and is after A$18.9 million (FY18 A$0.3 million) of write-downs and provisions being applied to reflect the change in business strategy to move away from own-buy.

Banking Facilities

Subsequent to the refinancing the Group will not be relying on trade and overdraft financing to support the business operations. The sell down of 'own-buy' inventory and the switch to an inventory light business model will reduce the overall reliance on external financing to support inventories and other working capital requirements.

Underlying Basis, Exceptional Items

As noted above the Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items of a non-trading nature as this, in the Board's opinion, provides a more representative measure of the Group's performance. In the FY19 year due to the restructuring this approach has resulted in the profit and loss statement to be split out into 3 columns for each financial year. Full details on exceptional items are contained within Note 10 to the financial statements. A reconciliation between reported profit before tax and underlying EBITDA is included at Note 7 with further details in Note 10 to the financial statements and outlined below.

Included within one-off items are items of a non-trading, non-recurring nature such as reorganisation costs, asset write downs, charges arising from system migrations and other costs. The principle items in the year under review are the impairments and inventory write-downs. The impairments include; an A$2.8 million goodwill impairment and A$6.8 million impairment of receivables from the wholesale business.

Key Performance Indicators

The Group manages its operations through the use of a number of key performance indicators [KPI's] including revenue growth, gross margin %, Underlying EBITDA, active customer growth, monthly buyers, AOV, revenue per customers, orders per customer and number of suppliers.

_____________________________

Carl Jackson

Chief Executive Officer

4 December 2019

The above statement of changes in equity should be read in conjunction with the accompanying notes

The above statement of cash flows should be read in conjunction with the accompanying notes