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Online retailer Mnemon Group books $1.2 million loss in "transformational" year

Online retailer Mnemon Group books $1.2 million loss in "transformational" year

Owner of DealsDirect and TopBuy posts $67 million in revenue

The group which controls DealsDirect and TopBuy has posted a loss of $1.2 million loss despite recording $67 million in revenue in what was described as a "transformational" year.

The year included a successful reverse listing, capital raising, the acquisition of TopBuy and the proposal to merge with Grays Online.

It booked revenue of $63.9 million, a fall from the previous year's figure of $67.8 million.

However the net loss before tax ($1.2 million) was significantly improved from $11.3 million in the previous year.

Gross profit was also up 30 per cent to $15 million, while its balance sheet remain solid with $5.8 million in cash.

Its customers base has grown to more than 650,000 and the average order value increased 10 per cent to $129 from $117 in the previous year.

Mnemon chief executive, Michael Rosenbaum, said Mnemon was now well placed to pursue attractive consolidation opportunities.

"FY14 has been a transformation year for Mnemon," he said.

"In FY13 we decided to focus the core offer on www.dealsdirect.com.au. Throughout FY13 and into FY14 we closed a number of non-performing business units, refocused the marketing spend to strong return on investment based initiatives and reduced expenses.

"Pleasingly, during this period we have been able to maintain excellent customers satisfaction levels."

The company completed a strategic reverse-listing of DealsDirect into Mnemon to create a listed e-commerce entity with a mandate to consolidate e-commerce activities.

Following the listing, it announced the acquisition of TopBuy in April for $2.25 million, followed by the proposal to merge with Grays.

Rosenbaum said the opportunities were in line with the company's strategy to consolidate e-commerce assets that could leverage the group's scale and operating ability.

Read more: MNZ completes $2.25 million TopBuy acquisition

"TopBuy has key strength in the online retail space of branded consumer electronics, fashion and general merchandise," he said.

"In addition to efficiency synergies arising out of this transaction and increased scale, the acquisition of TopBuy has strengthened the company's online retail presence by combining the active customers bases of Dealsd Direct and TopBuy and providing cross-selling opportunities.

He said Grays was a leading Australian e-commerce company operating in the B2B and B2C segments of the market.

"If completed, the merger of Grays with Mnemon will create the largest listed online retailer in Australia."

Read more: Mnemon continues aggressive acquisition strategy with TopBuy purchase

The merged company will be renamed Grays eCommerce Group.

Rosenbaum said the combined group would bring together premium e-commerce retail brands including DealsDirect, TopBuy, GraysOnline and OO.com.au, and would deliver sales of $440 million.

"Our growth strategy involves both organic growth within product ranges, and strategic growth via acquistions," he said.

"This is an exciting time for Mnemon, and we look forward to the next 12 months as we look to create the lading e-commerce group in Australia."

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Tags Michael RosenbaumOO.com.auMnemon chief executiveGrays Online

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