Revolution Beauty releases financials to reassure shareholders following Boohoo coup attempt
23 Jun 2023 --- Revolution Beauty has provided an update today on its trading for the first three months of the financial year ending February 28, 2024 to bring relief to its shareholders following an altercation with Boohoo, which has a 26.6% stake in the company. Yesterday, news circulated about Boohoo demanding to install its leadership inside the Kent-headquartered British makeup firm.
Now, Revolution Beauty’s board believes it is appropriate to update all shareholders on the group’s most recent trading performance in light of the “hostile requisition notice” received by Boohoo.
Previously, Revolution Beauty called Boohoo’s request a “hostile shareholder action” in a “reckless” and “cynical attempt without financial outlay nor any compensation to Revolution Beauty shareholders.”
“The trading performance in the year’s first quarter shows that we are delivering on our global retailer strategy. This has been achieved at the same time as fixing the historical issues overseen by previous management and putting in place improved cost controls and processes across the business,” says Bob Holt, CEO at Revolution Beauty.
Revolution Beauty says it is capable of growing the brand (Image credit: Revolution Beauty).Focusing on growthThe company reports sales rose 60% year on year with gross margins of 48.2%. These numbers can be compared to 41.7% in last year’s corresponding period. The earnings before interest, taxes, depreciation and amortization at constant currency were £3.5 million (US$4 million). Quarter one FY24 had a £7.4 million (US$8.6 million) loss.
Revolution Beauty says Boohoo’s stated rationale for the proposed changes to the Revolution Beauty board is that the focus of the group must switch to growth. Revolution Beauty hopes that by releasing the following numbers, its shareholders will be reassured that the current board is similarly minded and that development is being delivered without one shareholder taking control of the board at the expense of the interests of other shareholders.
The board of Revolution Beauty says it is focused on ensuring value creation at this “critical time” for the company. The board says that Boohoo’s “hostile requisition is value-destructive, opportunistic and self-serving, as well as not being in the interests of the company’s shareholders as a whole.”
Yesterday Boohoo released a statement saying it intended to include Rachel Horsefield, the former CEO of Beauty at THG, a business Revolution Beauty has recently undertaken to cease commercial relationships. According to Boohoo’s announcement, Horsefield “brings a wealth of directly relevant experience and expertise in the beauty sector.”
Revolution’s plan
Revolution Beauty responds after Boohoo tries to take more control.Revolution Beauty intends to appoint Rachel Maguire and Matthew Eatough as non-executive directors.
Revolution Beauty’s statement,says Boohoo’s announcement yesterday “vindicates its view, as stated in the company’s announcement of June 21, that Alistair McGeorge and Neil Catto (Boohoo’s two current board candidates for Revolution Beauty) do not have the relevant experience in running a business in the beauty sector, nor in supplying a store estate and beauty product range which is focussed on the high street.”
The board of Revolution Beauty says it is “much better placed than the proposed Boohoo candidates to deliver shareholder value.”
“Revolution Beauty has clear positive momentum, and we remain focused on restoring trading in the company’s shares. We have a strong platform to deliver continued profitable growth,” concludes Holt.
Edited by Sabine Waldeck
