More bad news from cosmetics supplier Revolution Beauty (LON: REVB) from its auditors and the share price has nearly halved to 8.73p. The company joined AIM less than 13 months ago at 160p a share, so the share price has slumped by nearly 95%.
Revolution Beauty had already warned on 2 August that its 2021-22 results would be delayed and cut its expectations for 2022-23. Poor retail demand in the US and the loss of £9m of Russian and Ukraine revenues hit the early part of the new financial year. Online demand is switching to store sales and cost increases have hit profitability. That led Zeus to slashing its 2022-23 pre-tax profit forecast by 64% to £6m.
However, the auditors have come up with more problems, which will have a material effect on the 2021-22 results and significantly reduce the estimated pre-tax profit of £9.9m. Revenue recognition, bad debt provisions and stock provisions are involved.
It may be difficult to finish the audit in time to report the results by the end of August as was previously promised.
Management says that net debt at the end of July 2022 will still be £21.2m and the estimates for 2022-23 figures will not be changed.