After raising £300m at 160p in July, it’s great to see that Revolution Beauty (REVB continues to fire on all cylinders.
Growing sales 35% LFL in H1’22 to £78m & is firmly on track to hit FY22 (y/e Feb) expectations of £22.5m in adjusted EBITDA on sales of £198m. Particularly driven by the US (+90% in H1), Haircare (+203%) & several other exciting new initiatives such as:
1) Continued digital & physical expansion - with 350 of Boots UK’s largest stores set to stock ”Makeup Revolution" products in prominent locations from early 2022.
2) Strong US demand at Target & Ultrabeauty, where #REVB is now the top performing brand in the former’s cosmetics category.
3) Ongoing expansion of Skin & Haircare, alongside the direct-to-consumer channel (+200k new customers added). Recently boosted too by the successful partnership with THG Ingenuity to accelerate #REVB’s global footprint.
CEO & founder Adam Minto adding: “the long-term growth opportunity in mass beauty remains vast with more consumers switching to online, while the market as a whole continues to grow rapidly globally.
Revolution Beauty is well positioned to take advantage of these trends through its innovative influencer led marketing strategies and on-trend products that deliver quality at an accessible price point."
Wrt valuation, I reckon turnover could readily climb to £400m+ over the next 5 years. Which on a sector 20x EBITDA multiple & using modest 12.5% margins, would generate a hypothetical £1bn valuation, or 320p/share.
However using Adam’s more ambitious £1bn revenue goal – then the upside scenario would theoretically produce an 8-fold return (£12.90/share), assuming 20% EBITDA margins due to greater operating leverage.
Interims are scheduled for 24th November.