(Alliance News) - Made.com Group PLC shares jumped on Monday after it said it has invited a number of potential buyers to progress towards firm takeover offers by the end of October.
Shares in the online furniture seller were up 20% to 8.49 pence each in London on Monday morning. The company floated on the London Main Market only last year, listing at 200p in June 2021. It was worth GBP775 million then, but its market capitalisation now is under GBP34 million.
Last month, Made.com had announced that it would conduct a formal review of strategic options, as it continues to grapple with tumbling demand amid cost-of-living pressures. The options include a sale process or a strategic investment.
Earlier this month, the company said it has begun discussions with a number of interested parties regarding its sale.
It explained that these parties will be invited to put forward non-binding indicative proposals in the middle of October.
The company also said that it expects to require additional funding in the region of GBP45 million to GBP70 million over the course of the next 18 months.
On Monday, Made.com said that the proposals have now been reviewed and it has now invited a "select number" of parties to progress towards firm offers be the end of October, following a due diligence process.
It explained that the proposals provide a range of different transaction structures, including possible offers for the issued and to be issued share capital of the company.
"Current discussions may be altered or terminated at any time and, accordingly, there can be no certainty that an offer will be made, nor as to what the terms of any offer may be," the company added.
In March, Made.com released its 2021 results. Pretax loss widened to GBP31.4 million from GBP14.6 million in 2020, despite revenue growth of 50% to GBP372 million from GBP247 million. Administrative expenses increased to GBP122.2 million from GBP88.2 million and cost of sales widened to GBP199.8 million from GBP115.7 million.
In a July trading update, the company said gross sales in the first half of 2022 were 19% lower year-on-year, though up 55% from pre-virus levels, and it noted that profit for 2022 is expected to take a GBP20 million one-off hit from clearance work related to excess inventory and additional costs in its supply chain.
In the July update, Made.com lowered its 2022 revenue guidance to a range of a 9% fall to a 24% fall from between 8% growth and a 7% decline previously.
By Sophie Rose; sophierose@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
