Revolution Beauty has said it expects to post weaker than expected profits after discussions with its auditor.
The London-headquartered firm previously said it expected to report adjusted EBITDA of between £6m and £6.5m for the financial year ended 28th February 2025.
It notified the London Stock Exchange today: “This figure included an adjusting item in relation to stock provision charges for non-strategic stock, with a value of approximately £10.3m.
“In the interests of agreeing the sign off of its accounts, the company has agreed with its auditors to change the definition of the adjusting item such that it now relates solely to inventory that was sold, or is expected to be sold, through outlet channels.
“As a result of the change in definition, the value of the adjusting item is now expected to be approximately £8.5m. Consequently, FY25 adjusted EBITDA is now expected to be approximately £4.7m.”
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This would represent a drop of 63% from its 2024 EBITDA of £12.6m.
In June Mike Ashley’s listed retail group Frasers – which owns brands including House of Fraser, Sports Direct and Evans Cycles, as well as holding stakes in THG, ASOS, Hugo Boss and Currys – withdrew its intention to acquire Revolution in a cut-price deal.
It also has stakes in boohoo, despite Ashley having been involved in a well-publicised feud with its chairman, Mahmud Kamani, culminating last week in a demand for his suspension and an independent investigation.
“The formal sale process continues to progress with ongoing engagement with a number of parties,” said Revolution today. “The company also continues to progress and advance its constructive engagement with its stakeholders, including in respect of a potential equity raise.
“Further announcements will be made as appropriate with audited results for FY25 to be published before the end of August 2025.”
Revolution had a market cap of £500m at the time of its IPO in 2021, but this now sits at £12.4m. Its share price has dropped 80% in the year to date and 26% in the last month.
Boohoo, now known as Debenhams Group, owns a 27.09% stake in Revolution.