Owner of W.Lane, Rockmans expects $33m earnings turnaround

The ASX-listed fashion retail group that owns such brands as W.Lane, Katies, Rockmans and Autograph anticipates a $33 million turnaround in earnings for FY23, despite a higher cost of purchasing goods, higher logistics costs and an unfavourable US dollar.

Sydney-headquartered Mosaic Group (ASX: MOZ), which has 804 stores across Australia and New Zealand with nine brands also including Liz Jordan, Beme, Noni B, Rivers and Crossroads, expects to record an EBITDA of $17 million for FY23.

This compares to an EBITDA loss of $16 million in FY22, and follows a December half result where earnings almost tripled thanks to a return of in-store shopping and a "completely reformed business cost structure".

According to a quarterly activities report released today, Mosaic saw operating cash inflows of circa $11.9 million in the June quarter, representing an improvement of operating cash outflows of $17.6 million in the three months to 31 March.

This quarterly improvement is not as significant as it seems however, as Mosaic notes the seasonality of fashion retail means it usually records net cash outflows in the September and March quarters, and net inflows in the December and June quarters.

For the year, store-only comparable sales were up 9.6 per cent, while online sales - which represent one fifth of all sales - were down 6 per cent.

The group expects to report total sales of around $519 million when it reports on its full-year audited result next month, up 6.2 per cent on FY22.

In April Mosaic Brands announced administrators had been called in for its e-commerce brand acquired in 2021, Ezibuy.

"The board believes this process to restructure EziBuy is in the best interests of the group’s shareholders as it will improve the group’s overall net asset position and operating cashflow," Mosaic said at the time.