- Step One Clothing (STP) identifies a potential overclaim of GST credits on an Australian supply made by a foreign corporation which was not previously identified
- The financial impact of the overclaim in FY22 is estimated at $1.6 million and the company is now in the process of informing the Australian Tax Office
- The company has faced challenges in both the UK and Australia over the Black Friday and now Christmas trading periods which increased customer delivery times and impacted media spend effectiveness
- Despite the overclaim, the company says it reaffirms its proforma FY22 EBITDA forecast of $15 million as per the prospectus
- Step One Clothing shares are in the red, down 28.3 per cent at $1.69
Shares in Step One Clothing (STP) have fallen after it identifies a potential overclaim of GST credits on an Australian supply made by a foreign corporation that was not previously identified.
A preliminary review of other foreign suppliers has been completed, resulting in the conclusion that this issue is limited to one supplier.
The financial impact of the overclaim in FY22 is estimated at $1.6 million, in FY21 it is estimated to be $1.3 million and $200,000 in FY20 and prior years.
The company says they are in the process of informing the Australian Tax Office of the overclaim and a full and detailed GST review will be undertaken in the coming months.
STP began life on the ASX at the start of November and is an online, direct to consumer innerwear brand.
Step One expects first-half sales revenue of around $36 to $39 million, being approximately 12 per cent growth on the previous corresponding period.
The company faced challenges in both the UK and Australia with logistics during the Black Friday period which increased customer delivery times and impacted media spend effectiveness.
This backlog has now been cleared however, it did impact the Christmas trading period with several pre-Christmas campaigns and new colour launches were withheld and the release of the women’s line was delayed.
UK business performance is expected to improve in H2Y22 given the successful initial launch of thermals into the UK market and expects sales revenue to grow 21-25 per cent for FY22 with its entrance into the US market.
Despite the overclaim, the company says it reaffirms its proforma FY22 earnings before interest, taxes, depreciation and amortization forecast of $15 million as per the prospectus.
Further information on the company’s sales and performance will be delivered on February 22 next year.
Step One Clothing shares are in the red, down 28.3 per cent at $1.69 at 12:53 pm AEDT.