Mosaic Brands is undertaking a $ 32 million capital increase to strengthen its balance sheet, after returning to profitability in FY21.
The AFR reports that Spotlight Group is taking $ 10 million of the capital raising, while Alceon Group is expected to subscribe for about 36%, with the balance to be offered to existing shareholders on a pro rata basis.
Mosaic Brands titles were suspended by ASX yesterday and will remain suspended until Friday, September 03 or when the retailer publishes an announcement in the market.
The capital increase comes as the retailer seeks to strengthen its balance sheet given continued uncertainty in the market due to COVID-19 lockdowns and restrictions across the country.
This decision follows the publication of the Group’s results for fiscal year 21, which saw Mosaic report an EBITDA (excluding EziBuy) of $ 48 million compared to – $ 45 million for the previous corresponding period (PCP).
Mosaic Brands CEO Scott Evans said he was pleased with the results.
“Despite continued significant disruptions to our business throughout the year, including numerous lockdowns and store closures, we are extremely pleased with the results we have achieved and the return to profitability through the measures we have taken. taken to reset the whole group for the future, ”he said.
The actions of the company’s reset plan – which includes reduced share ownership and improved lease portfolio agility – resulted in a $ 43 million reduction in operating costs over the course of of fiscal year 21 compared to the PCP.
“The benefits of these actions became evident in the fourth quarter, which saw our most profitable second quarter on record with same-store sales growth of 27.9% and like-for-like margin growth of + 133%, against a backdrop of of moderate sentiment among our core customer group due to COVID-19, ”commented Evans.
At the same time, the Group’s digital strategy continued to generate solid results during FY21.
During the period, Mosaic achieved record online sales of $ 111 million, up 19% from PCP, with digital sales accounting for 19% of total revenue.
Over the past 12 months, the company has increased its number of online SKUs to 1.5 million, from 150,000.
This wider range is attracting new customers, Evans said.
“Over the past year, around 200,000 in-store-only customers have switched to shopping online as well, and the group has acquired 200,000 new online-only customers through the expansion of its category and product lines.” , did he declare.
“We expect this trend to continue and this underpins our focus for FY 22 of department stores, big brands and an even wider online range to respond to changes in shopping behavior. of our customers, ”said Evans.
Over the year, the Group’s same-store sales fell 8%, with a margin up 7% on PCP.
However, trading in the second half of the year improved, with Mosaic reporting a 5% increase in same-store sales and a 37% margin increase on PCP.
Mosaic said gross margin generated an additional $ 37 million on PCP, while the group’s margin increased 59.4% on PCP.
Mosaic Brands ended the period with net cash of $ 25.1 million, up from $ 3.6 million in FY20.