Mosaic Brands trading update for FY24

Mosaic Brands (ASX: $MOZ) has provided a trading update for the 2024 Financial Year. The Group achieved a $13.1 million EBIT in the first half, but faced challenges in the second half, resulting in a marginal loss at the Operating EBITDA level for FY24. The issues experienced during the year are expected to be largely resolved, and the Group anticipates a recovery in the first half of FY25.

Executive Commentary on FY24 Trading Update

The second half of FY24 has been challenging for Mosaic Brands, primarily due to disruptions during the migration to a fully integrated logistical supply chain and distribution system with a newly appointed global partner. These disruptions, combined with softness in consumer spending, led to a severe impact on revenue and earnings in the fourth quarter, resulting in a marginal loss at the Operating EBITDA level for FY24. However, we anticipate a recovery in the first half of FY25, as the issues with the new logistics model have been largely resolved, and inventory is normalizing across the Group. Additionally, the first half of FY25 is expected to benefit from a 20% increase in inventory intake at a 10% lower cost price compared to H1 FY24, along with material annual cost savings associated with the new logistics partnership. We are also actively managing our working capital position and progressing the terms of a refinancing or extension of our outstanding convertible notes. We look forward to providing a full update when we post our full year FY24 audited financial results in August.

Summary of Mosaic Brands FY24 Trading Update

Mosaic Brands faced challenges in the second half of FY24, resulting in a marginal loss at the Operating EBITDA level. The disruptions during the migration to a new logistical supply chain and distribution system, combined with softness in consumer spending, impacted revenue and earnings. However, the Group anticipates a recovery in the first half of FY25, as the issues with the new logistics model have been largely resolved, and inventory is normalizing across the Group. FY25 is expected to benefit from increased inventory intake at a lower cost price and material annual cost savings associated with the new logistics partnership. Mosaic Brands continues to actively manage its working capital position and is progressing the terms of a refinancing or extension of its outstanding convertible notes. The Group will provide a full update when it posts its full year FY24 audited financial results in August.