Mosaic Brands swings back to profit

Retailer plans a capital raising to bolster its balance sheet in the face of uncertainty around Covid-19.

Mosaic Brands CEO Scott Evans is planning a capital raising to bolster the retailer’s balance sheet. Picture: John Feder/The Australian.

Mosaic Brands, the fashion retailer whose retail chains include Noni B, Rockmans, Katies and Crossroads, has swung back to profitability in 2021 after a horror 2020 that saw it sink to more than $170m in losses, with it also posting record online sales and improving margins.

The retailer said it is also planning to launch a capital raising to bolster its balance sheet in the face of uncertainty around Covid-19 and protracted lockdowns, and will release the details of that raising at a later date.

On the last day of the reporting season, Mosaic Brands released its annual results which showed profit at $2.78m as revenue fell 3.8 per cent to $708.766m. No Dividend was declared.

Mosaic Brands said for fiscal 2021 comparable store sales were down 8 per cent with margins up 7 per cent. For the second half it posted 5 per cent growth in comparable sales and a 37 per cent margin lift.

Online sales achieved record revenues of $111m, up 19 per cent and now represent 19 per cent of total revenue.

As a shareholder of online retail business EziBuy, which it recently invested in, the group has worked with them to return them to profitability after two years of losses and delivered an EBITDA of $3.7m.

It said online sales continued to accelerate since July by delivering 23 per cent growth in the first eight weeks of fiscal 2022 with comparable store sales down 8 per cent despite the impact of lockdowns on its large portfolio of bricks and mortar stores.

It received just under $95m in government wages subsidies and $25m in rent concessions.

“Notwithstanding significant ongoing disruptions to our business throughout the year, including numerous lockdowns and store closures, we are incredibly pleased with the results we have achieved and the return to profitability due to the actions we took to reset the entire group for the future,” said Mosaic Brands CEO Scott Evans.

“The benefits of those actions became evident in the fourth quarter, which delivered our second most profitable Q4 on record with comparable sales growth of 27.9 per cent and comparable margin growth of 33 per cent, against a backdrop of subdued sentiment among our core customer group due to Covid-19.”

Originally published as Mosaic Brands swings back to profit