UK-based online retailer MySale Group, which owns and operates Australian e-commerce site OzSale, confirmed that the change to Australian GST regulations had a substantial effect on its earnings in the six months to 31 December 2018, and it anticipates an underlying EBITDA loss for the period.

The new regulations, which did away with the GST exemption for imports valued under $1000, were put in place to create a level playing field for local retailers in the face of global marketplaces launching in Australia.

MySale had previously warned that the GST change would have a negative effect on its business, and that efforts it had made to ensure compliance had impacted the health of the business.

The group also blamed its product mix and issues with its inventory, with both factors being improved moving forward, including increase local sourcing, to improve gross profit margins.

Revenue was impacted by a planned reduction in the group’s offline activities during FY19, with sales down 17 per cent to $126 million. Online revenue also decreased 13 per cent to $120 million.

Better performance is expected in the second half of the year due to accelerated efforts in the group’s cost saving program which are to deliver $10 million, in combination with improved margins, with the group expecting a small EBITDA profit for the full year.

“Whilst performance during the first half of the year has been disappointing, we have taken immediate action to address the issues,” MySale chief executive Carl Jackson said.

“Our previous plans to streamline and automate the business have been accelerated and these actions are already delivering results. The changes to product strategy are materially underway and will be completed in the second half.”