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

Embattled retailer Revolution Beauty saw losses more than halved in the first half of last year as store purchases largely offset a slide in online trade.

In results significantly delayed by auditing problems, the firm posted a £13.4million loss for the six months ending August 2022, down from £28.9million the prior year.

Loosened pandemic restrictions produced a resurgence in sales at brick-and-mortar outlets, with a further boost provided by new distribution deals with pharmacy giants Boots and Walgreens.

Accounting issues: Revolution Beauty shares have been suspended since last September due to auditing problems associated with its 2022 financial results 

This failed to prevent total turnover from declining by 4.2 per cent as the return of physical stores left digital customers carrying excess stock.

Yet the company incurred a much smaller stock provision charge during the period, while it also benefited from an absence of initial public offering fees and reduced finance costs after debts from the listing were paid down.

Revolution Beauty went public on the junior AIM market in the summer of 2021 with a market capitalisation of almost £500million following a pandemic-induced boom in orders and massive growth in the US.

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

However, problems took a major turn for the worse when auditors raised accounting issues about the Kent-based firm’s 2022 financial results last summer, and trading of its shares on the AIM index was suspended.

An investigation found that Revolution Beauty had overstated its sales by £9million and that former chief executive Adam Minto and co-founder Tom Allsworth took out £1million in loans without the board’s knowledge.

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

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

On Friday, Holt said the release of the interim results was an ‘important step’ towards ending the suspension of the company’s shares.

He added that the company’s performance since last September proved it had a ‘highly relevant and attractive customer offer, providing consumers with quality products at the right price.

‘This, combined with the strength of our customer partnerships and global retailer strategy, underpins our confidence.’

Revolution Beauty expects to report revenue rose by a low single-digit percentage figure, alongside a slight underlying earnings loss for the 2023 financial year.

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