Revolution Beauty’s delayed half-year results show losses plunge

Struggling retailer Revolution Beauty saw losses more than halved in the first half of last year as in-store purchases largely offset a decline in online commerce.

In results significantly delayed by auditing issues, the company posted a loss of £13.4m for the six months ending August 2022, down from £28.9m the previous year.

Easing pandemic restrictions fueled a resurgence in sales at brick-and-mortar outlets, with further impetus from new distribution deals with pharmacy giants Boots and Walgreens.

This failed to prevent overall sales from falling 4.2 percent as the return of physical stores left digital shoppers with excess inventory.

Still, the company incurred much lower equity raising costs during the period, while also benefiting from the lack of IPO fees and lower borrowing costs after the listing’s debts were paid off.

Revolution Beauty went public in the summer of 2021 in the junior AIM market with a market cap of almost £500 million following a pandemic-induced order explosion and massive growth in the US.

Since then, sales have struggled amid a global cost-of-living crisis, caused in part by the war in Ukraine and a slowdown in the e-commerce sector.

Things took a major turn, however, when accountants raised accounting issues over the Kent-based company’s 2022 financial results last summer, and trading of its shares on the AIM index was suspended.

An investigation found that Revolution Beauty overstated its turnover by £9 million and that former CEO Adam Minto and co-founder Tom Allsworth took out £1 million in loans without the knowledge of the board.

Allsworth resigned as chairman last week, the day before the group finally published its 2022 results, which showed losses escalating from £17.8m a year earlier to £44.9m.

Minto resigned shortly after the probe was launched and was replaced by Bob Holt OBE, the former executive chairman of social housing energy supplier Sureserve.

On Friday, Holt said the release of its interim results was an “important step” toward ending the suspension of the company’s stock.

He added that the company’s performance since September last year has proven it has a “highly relevant and attractive customer offering, offering consumers quality products at the right price.”

“This, combined with the strength of our customer partnerships and retailers’ global strategy, supports our confidence.”

Revolution Beauty expects to report sales up low single digits in addition to a slight underlying profit loss for fiscal year 2023.

Founded in 2014, the company’s hair, skincare and makeup products are all vegan and can be purchased from multiple prominent retailers such as ASOS and Superdrug, as well as Target in the United States.