Revolution Beauty Group PLC’s fractured relationship with major shareholder boohoo Group PLC came one step closer to resolution with today’s changing of the guard.
As announced in a regulatory statement, Walgreens and Boots alumni Lauren Brindley will take the mantle at the beleaguered AIM-listed makeup group, replacing Bob Holt, who stood down today.
Alistair McGeorge will move to the role of non-executive chairman when Brindley officially steps up to the plate on 18 September.
Holt had already offered to resign in July as part of a peace treaty with 26.6% shareholder boohoo, the retailer that has been gunning for a change of leadership since June.
As part of the shakeup, Colin Henry and Chris Fry have taken spots as independent non-executive directors in place of Jeremy Schwartz, Rachel Maguire and Matthew Eatough.
Brindley said she was “thrilled to be joining Revolution Beauty at such a pivotal moment for the group”.
Yet Brindley faces a lot of challenges in this pivotal moment.
Full-year results underscore steep debt pile
As for Revolution’s financial results, the group increased revenues by 3.2% year on year to £187.8 million on a 40.4% gross profit margin, marking a 190-basis-point improvement.
However, the group was stung by extensive legal, professional and restructuring fees resulting in a reduced cash balance and a mounting pile of debt.
Gross cash at the end of the period was £11 million, down from £15.6 million in 2022, with net debt increasing from £8.4 million to £21 million on the back of a fully drawn £32 million banking facility.
Underlying earnings also underwhelmed, with surging marketing and staffing costs resulting in £7.5 million worth of EBITDA losses compared to just £800,000 in 2022.
These legal fees were related to an independent investigation into historical sales and personal loans made by its former chief executive Adam Minto, who resigned with immediate effect in November 2022.
Can Revolution’s third head honcho finally steer the ship in the right direction?
Judging by the shareholder response to today’s earnings, Brindley may have a hill as steep as Revolution’s equity deficit to climb.
Revolution tanked 17% post-earnings, though the group remains 15.5% high year to date with an £88.5 million market value.