The Mosaic Brands board is anticipating continued growth in its earnings before interest, tax, depreciation and amortisation (EBITDA) for FY24.

However, Mosaic Brands chairman Richard Facioni said as the company navigates the rest of FY24, “we face two factors outside our direct control.”

“Currency exchange rate movements and volatility, impacting our costs,” Facioni said. “And fragile consumer confidence leading into Christmas, compounded by persistently high inflation.

“We continue to actively manage our exposure to the first and believe we can only benefit from any flight to value.”

Facioni said unless there is further adverse movements in currency exchange rates or consumer sentiment, EBITDA for FY24 should grow against FY23.

“However these factors, which are impacting the retail sector generally, make providing formal guidance challenging,” he said. “Growth and lifting profit is our focus as a board, management team and organisation for FY24.”

In FY23, Mosaic brands swung into the black with an EBITDA of $17.1 million, against a loss of $16.4 million in FY22.

Mosaic Brands CEO Scott Evans said this came whilst managing a negative impact of $4.5 million in the second half due to the USD exchange rate.

The $33.5 million swing, according to Evans, highlights changes the group has implemented over the past three years in order to return to immediate profitability in a post-pandemic world.

“Our Mosaic journey has been for almost 9 years and we have delivered $114 million in EBITDA, after absorbing -$61m of losses during the COVID periods,” Evans said.

“Since starting with our first acquisition in 2014 and acquiring nine distressed and loss-making brands over the following four years - turning them all around to deliver multiple years of consistent earnings growth - it is important to highlight that although the impact of the pandemic over the past three years has been hugely significant, it is now behind us and we consider it a reset moment.”

Evans said Mosaic Brands perceives 2023 as it did in 2014.

“That we have again turned around loss-making brands to deliver a profit and we see the next five years as a growth phase for the group, as we did in the 2014 to 2019 period,” he said.

Part of the growth is attributed to comparative store sales, which Evans said have grown 13 out of the last 16 months. This comes as Mosaic Brands is investing in 40 new large format stores, to be opened by FY24 end.

“We are taking market share in a high-inflation environment where there is a flight to value,” he said. “We are successfully shifting to broaden both the age and gender profile of our customer base through our regionally focused big box Rivers stores.”

Evans added that its online sales in October leading into the critical Black Friday sales period are lifting after heavy first quarter investment in its new AI-driven ecommerce platform.

“After the sledgehammer of COVID impacting our unique customer segment, they are now one of the most inflationary protected customers and we are seeing that deliver the results today.

“Challenges remain and of course, consumer confidence is a constant and fickle companion of any retailer.”

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