Troubled makeup brand Revolution Beauty upped its outlook on Wednesday, saying it is benefiting from a new strategy which hopes to turn around its fortunes.
The business said that adjusted earnings before income, tax, depreciations and amortisation – a measure of profit which strips out many costs – will be “at least” £12.5 million in the year which ended a month ago.
That is an increase from the company’s previous expectation, that the figure would hit between £11 million and £12 million.
Revolution Beauty also told shareholders to expect that it will report a 2% rise in revenue in the year to the end of February. That sheds more clarity on the previous guidance that revenue would grow in the “low single digits”.
It has been a tough time for Revolution of late. The business last month came to an agreement with its former boss Adam Minto which will see him pay nearly £3 million to the firm.
The company was thrown into crisis in 2022 when its auditors refused to sign off on its accounts for the previous year.
Its shares were suspended, and a subsequent investigation found that the accounts had counted £10 million of sales towards revenue that should not have been included.
The investigation brought claims to light that Mr Minto, and Revolution Beauty’s former chairman and co-founder Tom Allsworth, had made personal loans to an employee which were not disclosed to the board.
Revolution had said it might take Mr Minto to court, but instead reached an agreement with its former boss. He stepped down in November last year.
On Wednesday his replacement as chief executive Lauren Brindley said: “It is early days, but we are already seeing positive impacts from the new strategy, including an encouraging response from our major customers and good progress on our cost savings programme.
“Our focus on driving sales from our more profitable brands is starting to deliver, with double-digit growth in sales of our core “Revolution” masterbrand versus the second half of the 2023 financial year.
“Our major product launches for 2024 are ahead of plan as we focus on fewer and more impactful new products.
“We also opened our TikTok shop this week and are preparing to go live with a new direct Amazon US partnership in May 2024.
“I remain highly confident about our growth prospects and our ability to become a top five mass beauty player.”