The MyDeal.com.au Ltd (ASX: MYD) share price is falling after the company released its financial year 2021 (FY21) earnings.
Right now, the MyDeal share price is 79.5 cents, 5.36% lower than its previous closing price.
MyDeal.com.au share price slumps on 1,700% drop in profit
Here's how the online retail store performed during FY21:
- $38.2 million of revenue – 144% more than that of FY20
- Loss of $5.8 million after tax – a 1,700% drop from FY20's $331,632 profit
- Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) came to a loss of $4 million
- Net cash flow from operations was an outflow of $3.9 million
- No dividend
While the company's FY21 results were pretty lacklustre, it wasn't all bad for MyDeal.com.au.
The company reported record gross sales of $218.1 million. It also reported its net transaction value was $204.6 million, up from $94.0 million in FY20. Additionally, its FY21 gross profit was $33.3 million, 119% more than that of FY20.
Mydeal stated its EBITDA loss was mainly driven by its increased spending on advertising and promotional activity, which is expected to support its goal of increasing customer acquisitions and investment into its private label business.
It invested $4.9 million into its private label's inventory in FY21. The private label contributed $8.8 million to the company's gross sales.
Before its private label inventory investment, MyDeal's operating cash flow was $1 million.
The company ended the period with $42.7 million cash and no borrowings.
What happened in FY21 for MyDeal.com.au?
FY21 was a big year for MyDeal and its share price with a corporate restructure in September and the company's debut on the ASX in October.
MyDeal raised $40 million through its initial public offering (IPO).
The company reported that the number of active customers increased 83% year-on-year over FY21. It ended the period with 894,225 active customers.
Repeat business also grew, with 59.4% of transactions in the fourth quarter coming from returning customers.
Customers now shop with MyDeal an average of 1.7 times per year, up from 1.5 times in FY20.
Finally, the MyDeal app represented around 10% of the company's sales over FY21. It launched in May 2021.
What did management say?
Commenting on the results, MyDeal.com.au founder & CEO Sean Senvirtne said:
FY21 represents a significant moment in MyDeal's history, a record 10 years in the making and just the beginning of what's to come… We have put ourselves in the perfect position to capture the increased demand in the market.
Now with over 1,100 active sellers, 6+ million products and a private label business on a steep incline, we continue to entrench ourselves as one of Australia's prominent online retail marketplaces for home and lifestyle products.
Senvirtne said MyDeal continued to scale by leveraging its proprietary technology across sellers, products and sales and "continuously refining the user experience".
We invest in efficient customer acquisition and retention strategies to accelerate active customer growth, while attracting marketplace sellers and investing in our private label offering to expand our range of products across in-demand categories.
Promoting and further optimising the app will remain a key feature of our strategy going forward.
What's next for MyDeal.com.au?
Here's what might drive the MyDeal share price in FY22:
While MyDeal didn't provide guidance for FY22, the company pledged to provide regular business updates.
It stated FY22 was off to a good start and noted its soon-to-launch multi-channel brand and advertising campaigns.
MyDeal said it would keep focusing on customer acquisition and its private label business in FY22.
MyDeal share price snapshot
The MyDeal share price has slipped 54% since its first close on the ASX. It is also currently 20.5% lower than its prospectus' offer price of $1 per share.
