The cosmetics group swings from a chunky first-half loss to positive EBIDA guidance, sending its shares sharply higher.
Revolution Beauty (AIM: REVB) shares rose 11.8% to 4.75p after the cosmetics group said it now expects first-half EBIDA of around £1m, a dramatic turnaround from the £12.5m loss recorded in the same period a year earlier.
The improvement came despite revenues staying broadly flat, with the company pointing instead to a stronger gross margin after last year's comparative period was dragged down by heavy clearance sales. Online sales, meanwhile, grew 22% in the first half, giving management further evidence that the underlying business is stabilising.
Revolution Beauty has spent the past two years rebuilding credibility with investors following an accounting scandal and boardroom upheaval that led to a suspension of its shares in 2023. Tuesday's update suggests the cost-cutting and margin-repair work now under way is starting to bear fruit, even with top-line growth still elusive.
Broker Cavendish, which currently forecasts a full-year pre-tax loss of £1.6m, said it is holding off revising that estimate until the company publishes full interim figures, leaving scope for the number to move once further detail on trading and costs is disclosed.
The bounce in Revolution Beauty came amid a broader flurry of activity across AIM, with SysGroup surging 14% after landing its first UK public sector contract and upgrading pre-tax profit guidance, while Billington gained 7.4% on the back of £42m of new data centre contracts. For Revolution Beauty specifically, the next test will be whether the improved margin performance can be sustained once full interim numbers, including any update to Cavendish's loss forecast, are released.
This report is based on Revolution Beauty’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Sonia Roselli on Unsplash.
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