Administrators look to sell or recapitalise collapsed Booktopia

Booktopia has collapsed into administration less than four years after listing on the ASX with an urgent assessment of the business now under way.

Booktopia co-founder and former chief executive Tony Nash.

Booktopia has collapsed into administration less than four years after listing on the ASX with administrators now undertaking an urgent assessment of the business.

McGrath Nicol Restructuring partners Keith Crawford, Matthew Caddy and Damien Pasfield have been appointed voluntary administrators of the online bookseller, whose online store is still in operation.

“The administrators are undertaking an urgent assessment of Booktopia’s business while options for its sale and/or recapitalisation are explored,’’ the administrators said in a statement to the ASX.

“The shares of Booktopia Group will remain suspended from trading during the

administration process. Shareholder updates will be uploaded to the ASX platform as required.’’

The administrators have asked parties interested in recapitalising or acquiring Booktopia to contact them urgently.

Booktopia shares were suspended from trade in mid-June, having fallen to just 4.5c.

This compares with the listing price of $2.30 per share in December 2020, and levels around $3 per share achieved about a year later.

When the shares were initially halted on June 13, Booktopia said it was finalising a “material announcement’’ about the outcomes of a strategic review announced in February, and its progress in seeking additional funding.

The most recent announcement to the ASX requested a voluntary suspension of the shares “as the outcomes from the strategic review including the seeking of additional funding have not progressed to the extent where it is capable of making an announcement’’.

Booktopia debuted on the ASX with bullish aspirations in late 2020, having booked a compound annual revenue growth rate over the five financial years to mid-2020 of about 26.4 per cent.

A series of operational missteps and tensions at the board and management level saw the company fail to maintain the momentum it built during the pandemic, with cofounder and chief executive Tony Nash initially stepping aside from the top job in May 2022, and then later ceding any executive functions later that year, while staying on as a director.

In early 2023 Booktopia cut 10-15 per cent of its staff - about 40 roles - in a bid to deliver $12m-$15m in earnings improvements, which chairman Peter George called a “disappointing but necessary step in these economic times’’.

Booktopia shares had already slumped to just 27.5c.

A $6m fine from the ACCC, for “making false or misleading representations on its website, and in dealings with consumers, about consumer guarantee rights’’ in relation to refunds didn’t help matters.

The company reported a net loss of $29m in 2022-23, with revenue falling 18 per cent to $197.6m.

In February this year the company announced a profit guidance downgrade from expected full year EBITDA of $13.5m to just $1m-$3m.

It also announced a strategic review “to explore all options to accelerate a return to acceptable earnings’’ and said its new customer fulfilment centre, launched the previous financial year, was having teething problems.

“The transition and its associated challenges had an adverse effect on sales revenue during the first half where: there was a decrease in the volume of inventory Booktopia was able to hold, with many products out of stock for extended periods; and the customer promise was also compromised, with longer delivery times for customers,’’ the company said.

The half-year report to the end of last December showed a revenue fall of 21.1 per cent to $86.3m, and a net loss of $16.7m.

The company’s net assets were negative to the tune of $20.9m, and the auditor flagged a material uncertainty relating to its ability to continue as a going concern.

In early June, Booktopia announced the results of its strategic review, with chief executive, former Amazon executive David Neinke, resigning with immediate effect.

Mr George assumed the role of executive chairman while Mr Nash came back on board as an executive director overseeing sales.

All of the board also agreed to be paid in nil-priced options rather than cash to help shore up the company’s balance sheet.

Another 50 roles were also to be cut, and Booktopia withdrew its guidance entirely. Chief financial officer Fiona Levens had also quit in May.

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Originally published as Administrators look to sell or recapitalise collapsed Booktopia