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Mosaic Brands revenues down nearly 11%

Mosaic Brands

Australia’s Mosaic Brands Limited revealed total revenues plunged 10.9% to $413.8 million for the half-year period, hurt by the recent bushfires that swept the nation over the holiday season.

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The owner of fashion brands including Noni B, Rivers, Katies, Millers and BeMe said earnings increased 36% to $32 million for the six months, while gross margin declined 6% to $247 million.

The company’s sales did, however, surpass analysts’ expectations, with Morgans expecting a 13.2 per cent fall in revenue and a 10.1 per cent drop in gross profit.

Net profit after tax also continued to rise, up 47.5% on the prior corresponding half to $14.1 million.

“It is unfortunate that, as announced in our trading update on 14 January 2020, these achievements have been overshadowed in the short term by the tragic bushfires which directly affected 20% or 276 of the group’s stores,” said Mosaic Brands, managing director, Scott Evans.

“This impacted overall group performance from November onwards. However, our loyal and skilled team combined with our strategies provide a solid base for further growth to capitalise on our many opportunities,” he added.

Mosaic Brands’ substantial improvements in margin and EBITDA, notwithstanding the external factors that have affected and continue to affect the group, were a great
achievement, demonstrating the group’s resilience and potential when the environment stabilises.

The company did not provide updated guidance. However, Mosaic Brands Limited, chairman, Richard Facioni, said that looking forward the group would continue to benefit from prioritising gross margin, via improvements in cost price, and a “disciplined approach to discounting.”

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“The company is well positioned strategically, with a sound balance sheet, first class management team and loyal customers. I am confident our multi-channel strategy will lead to further growth, capturing an increasing proportion of our customers’ share of wallet,” said Facioni.