FY21 result light the blue touchpaper

About the author:

Alexander Mees
Author name:
By Alexander Mees
Job title:
Co-Head of Research and Senior Analyst
Date posted:
26 August 2021, 1:30 PM
Sectors Covered:
Gaming and Retail

  • On almost every measure of activity, (ASX:MYD) achieved positive growth in FY21. Gross sales more than doubled. The number of active customers rose by 83%. There were more repeat visits. Customers transacted more often. Operating expenses increased too and, as a result, there was a $4m EBITDA loss, in line with our forecast. MYD had $42.7m of cash and is well able to absorb such an investment.
  • We think there’s a lot of opportunity for MYD to drive its advantage further in FY22. With a broader range of private label products, a recently launched mobile app and the introduction of a number of well-recognised brands to attract people to the site, we expect topline growth to continue strongly in the year ahead. With this note, coverage of MYD transfers to Alexander Mees.

A turbocharged topline

Gross sales more than doubled to $218.1m in FY21 (+111.1%). The 5-year CAGR of gross sales at the end of the year was +67.9%. The growth was built on an 83.1% rise in the number of active customers (to 894,225), each transacting 1.7x and spending an average of $143 each time.

To us, these numbers speak of an online marketplace that is gaining real traction with the Australian consumer. The focus at this stage in its development must, in our opinion, be on driving the top-line further, through investment in increased marketing, closer customer engagement and expansion of the range of products available on

With operating expenses (notably advertising costs) rising faster than revenue, MYD moved from a $0.7m EBITDA profit in FY20 to a $4.0m EBITDA loss in FY21 (MorgansF: $4.1m loss).

What MYD is going to do next

MYD has launched its private label range and made $8.7m of sales from this channel in FY21 (MorgansF: $8.8m). We expect further investment in private label inventory during FY22, which will support profits over the long run. We forecast sales of $13.0m in FY22, making up 5.1% of total net transaction value. 

In 4Q21, 59.4% of transactions were made by returning customers. More repeat visits will ultimately allow for reduced costs of customer acquisition. We see an opportunity for MYD to leverage its recently launched iOS and Android apps to further promote repeat visits through a loyalty programme.

We expect MYD to add more products with well-recognised brands to the site in the months ahead. We understand the strategy to be to introduce ‘known value items’ at attractive prices that will encourage even more visitors to

No material changes to our earnings expectations

We expect a similar EBITDA loss in FY22 to that recorded in FY21. Our estimate is $4.7m (was $4.3m). We see this improving to an EBITDA loss of $2.2m in FY23, before we forecast MYD to move into profitability in FY24.

Investment view: ADD

As discussed above, we don’t expect MYD to turn a profit in the current year (we never did), as all this investment in growth comes at a cost. But, to us, this story is not about short-term profitability and dividends. It’s about creating a market leading ecommerce platform that can be the foundation of substantial earnings growth.

We appreciate this is not an investment that will appeal to everyone. But for those that want exposure to a high growth ecommerce opportunity with a strong balance sheet, we think MYD fits the bill. We rate the stock ADD, with a 12-month price target (login to view target price), 22% above the last closing price. Our DCF-based price target falls because of a change in valuation approach from a blend of DCF and EV/GTV metrics to a DCF-only technique.


The primary risk to our positive investment view centres around execution. Our numbers assume MYD can sustain high levels of growth without stressing the balance sheet and will move towards profitability over a 2-3-year time horizon. If we’re wrong about this, our view will have been too bullish.

Find out more

Download full research note

You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.

If you would like access or more information, please contact your adviser or nearest Morgans office.

Request a call  Find local branch

Need access to our research?

You are also welcome to start a two-week trial of our online platform, which provides access to detailed market analysis and insights, provided by our award-winning research team

Create trial account 

Disclaimer: Analyst may own shares. The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

  • Print this page
  • Copy Link