Koovs plc (AIM: KOOV), the Western fashion experts for online Indian consumers, provides an update on its trading performance for the three months to 30 September 2019, being the second quarter of its 2020 financial year (“Q2 2020”).
Key Q2 2020 Highlights
· Gross Order Value (“GOV”) increased by 100% to £5.0m (Q2 2019: £2.5m)
· Trading margin* increased to 12% (Q2 2019: 7%)
· Website traffic up by 69% to 27.3m visits (Q2 2019: 16.2m)
· Conversion rates of 1.3% (Q2 2019: 1.1%)
The second quarter of the current financial year has seen a continuation of the strong growth in website traffic and GOV. This represents the completion of three consecutive quarters of growth in our key performance metrics set out above and is a clear indication of the strength of the Koovs’ underlying business model.
Update on FLFL Subscription and Near-Term Strategy of Company
As announced on 21 October 2019, Koovs was informed by Future Lifestyle Fashions Limited (“FLFL”) that the Reserve Bank of India (the “RBI”) now requires FLFL to reapply for approval prior to completing its outstanding £6.5 million investment into Koovs. FLFL has confirmed to the Company that it is in the process of reapplying for this approval and has confirmed its commitment to honour its investment into Koovs, whether through the existing mechanism (through the issue of compulsory convertible preference shares) or, to the extent available, an alternative route should the approval not be forthcoming.
The Company is working with FLFL to secure the committed investment, alongside considering other fundraising options available to the Company, in the event the RBI approval process is not completed within the coming weeks.
The Board has also determined to implement certain cash conservation measures, primarily in relation to reducing stock purchases and marketing spend, with the intention of ensuring there is the maximum time available for the various options available to the Company to be considered.
The Board will make further announcements as and when appropriate, and in the meantime notes that the other commercial initiatives in place between FLFL and the Company continue as normal.
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