Revolution Beauty Reports FY25 Results with Founders Returning and £15m Fundraise

Founders are back with a product-led plan

Co-founder Tom Allsworth is set to return as CEO once the shareholder circular for the fundraise is published, with co-founder Adam Minto joining as a consultant. The strategy doubles down on the business’s original playbook: fast, trend-driven innovation and a product-led model. A leaner organisation is central to the plan.

• Estimated additional annual staff cost savings of £7.5 million by FY27 via headcount reductions across geographies and functions (costs to achieve not disclosed).
• Resurrect some profitable SKUs that were discontinued, re-launch the Relove value brand with new retail partners, and open a profitable discount outlet channel.
• More “digital first” launches and tighter commercial discipline – focus on more profitable products, customers and channels.

Banking facilities extended to 2028 – if the raise lands

The lenders have agreed to extend the RCF to July 2028, reduce it to £28 million, and amend covenants in line with the new plan – but this is conditional on a successful equity raise, which itself needs shareholder approval. The raise of approximately £15 million is intended to reduce net debt and fund working capital. Until the raise completes, there is a material uncertainty around going concern noted by the Directors.

Why it matters: the combination of fresh equity and an extended, right-sized RCF lowers financial risk and should give management the breathing room to execute the turnaround. Failure to complete would leave the Group constrained.

Current trading and FY26 outlook: H1 tough, H2 should ease

Q1 FY26 net sales declined 29% year-on-year, with margins under pressure from clearance and US tariff increases ahead of retailer price changes. The company expects Q2 FY26 revenue to be down by roughly 25% year-on-year, but says monthly declines improved in June and July 2025.

Guidance for FY26:

• Revenue expected in the £110 million to £120 million range.
• Adjusted EBITDA: “low single digit millions” for the full year after staff cost measures are implemented.
• Targeting an annual adjusted EBITDA run-rate of £8 million to £10 million by the end of FY26, based on realistic demand and achievable gross margins.

Pockets of strength: Amazon in Europe and the US continues to grow strongly; some large US retail customers are back to year-on-year growth; Turkey is outperforming. Social followers rose from 6.4 million to over 7.0 million.

Adjusting items: what changed under the bonnet

• Non-core inventory clearance and related provisions: £8.4 million charge (treated as adjusting).
• Restructuring costs: £0.364 million.
• Costs linked to settlement of a claim from Chrysalis Investments Limited: £0.6 million; non-recurring legal fees £1.242 million (including FCA-related advice).
• Finance income in FY24 benefited from a one-off £10.2 million gain on deferred consideration changes – not repeated in FY25, which exaggerates the year-on-year swing in statutory profit before tax.

Note: an FCA investigation into potential Market Abuse Regulation breaches (covering July 2021 to September 2022) remains open. The company can’t assess potential liabilities at this stage.

My take: the good, the bad, and what to watch

Positives

• Inventory has been reset decisively – gross down 41.1% to £33.1 million; net down 53% to £21.4 million. That supports cash and should stabilise margins after H1.
• Operating costs cut by £17.7 million, with more to come from the £7.5 million staff cost plan.
• Conditional RCF extension to July 2028 plus the proposed £15 million raise would materially reduce short-term financial risk.
• Pockets of growth in Amazon and selected US and international accounts show the brand still resonates.

Negatives

• Sales fell 25.5% and Q1 FY26 was down 29% – revenue momentum is still negative.
• Statutory loss before tax of £16.8 million; net liabilities of £17.1 million underline the need for the raise.
• Gross margin pressure persists in H1 FY26 due to clearance and tariffs; recovery relies on execution and retailer price resets.
• The RCF extension depends on the fundraise; going concern carries a material uncertainty until money is in.
• FCA investigation remains an open risk; outcome not disclosed.

Why this RNS matters for shareholders

This announcement blends a tough set of numbers with a credible, if demanding, turnaround blueprint. The equity raise will be dilutive, but it is paired with a long-dated facility and a sharper, founder-led strategy: fewer SKUs, faster innovation, and a lean cost base. If execution matches the plan, margin and cash should improve as clearance rolls off and the new launches scale.

Key things to track next:

• Completion terms of the c.£15 million fundraise and any pricing discount.
• Final documentation of the RCF extension to £28 million and revised covenants.
• Q2 FY26 revenue decline (guided ~25%) and evidence that H2 decline rates “reduce significantly”.
• Gross margin trajectory post-clearance and post-tariff pass-through to retail prices.
• Delivery of the £7.5 million staff cost savings and the year-end EBITDA run-rate of £8 million to £10 million.

Bottom line: Revolution Beauty has taken its medicine. The founders’ return, a refocused product engine, and a repaired balance sheet could put the brand back on the front foot – but the raise and H2 trading need to land cleanly. I’ll be watching liquidity, margins and Amazon/US momentum as the leading indicators from here.