STEP ONE INVESTORS GET THEIR KNICKERS IN A TWIST
INVESTORS in the muchhyped sharemarket float of bamboo fibre underwear retailer Step One have lost their shirts after the company — which only listed in November — warned it would miss its sales and profit forecasts, triggering a 55 per cent share price collapse.
Step One, which sells ‘‘no chafe’’ underwear, said on Monday that it expected sales revenue growth to be 15 to 20 per cent, compared to previous guidance of 21 to 25 per cent. Expected proforma EBITDA was also revised from $15m in the float prospectus to $7m to $8.5m.
A revised forecast of fullyear revenue of $73m compares to previous midpoint guidance of $76m and $74m in its prospectus.
Step One sold its shares to the public in its IPO for $1.53 per share after raising just under $82m.
Step One’s trading update blamed poor sales growth in the US, a poor response to its women’s range, factory and logistics costs, as well as lockdowns in China and the war in Ukraine.
Step One was founded by 40-something environmentally-friendly male underwear entrepreneur Greg Taylor, who got the idea for his fastgrowing business while hiking in New Zealand only four years ago.
A former junior Australian representative rower, Mr Taylor emerged with about 123 million shares, or about 66 per cent of the company, when it listed.
Former National Rugby League and Football Federation Australia boss David Gallop joined Step
One’s board as chairman.
When it listed in November the stock raced to a high of $3 but is now down 93 per cent from that peak.
Gross profit margin for fiscal 2022 is expected to be closer to 2021 levels, despite recent increases in prices.
“These challenges are by no means insurmountable,” Mr Taylor said, “and I am completely focused on solving the issues we are facing … We had a track record of delivering in international markets, but we are now a much more substantial business and our focus is on building a strong platform, with the right infrastructure to support sustainable international growth. This will ensure that Step One is well-positioned to rebound strongly as global … disruption eases.”