Revolution Beauty secures financing and provides update on recently investigated audit

Revolution Beauty has received fresh financing to help rebuild the business after an investigation into its finances found several concerns, including some historical sales and personal loans made by its former CEO. 

The beauty group has secured an amended facility agreement with its banking partners worth £32 million, which gives it "sufficient liquidity as it continues delivering its strategy".

Revolution Beauty delayed its accounts after the group's auditor BDO identified a number of "serious concerns" that had arisen during the course of its work on the group's accounts for the financial year ending 28 February 2022. As a result, BDO was unable to complete its audit, which was due to be published by 31 August 2022.

Following this, BDO recommended the appointment of external advisers to undertake an independent investigation, resulting in the appointment of Macfarlanes and Forensic Risk Alliance. Revolution Beauty also formed an Investigation Committee to lead the process with Macfarlanes and FRA.

In October, Revolution Beauty's Executive Chairman Tom Allsworth and CEO Adam Minto agreed to temporarily step away from the business amid the ongoing investigation.

In November, Adam Minto announced his resignation. Shortly after, Bob Holt OBE was appointed as the group's new CEO. Holt had previously been providing leadership to the business as interim Chief Operating Officer.

Published in January 2023, the independent investigation into Revolution Beauty found several concerns, including some historical sales and personal loans made by its former CEO.

These issues included "materially larger than normal" orders. Some sales were "only undertaken for the purposes of meeting sales targets for FY22, and not all of the products ordered were required by the distributors at the time," with each of the distributors receiving a request from the group's management and given advantageous and non-standard payment terms.

In addition, Revolution Beauty's auditor raised concerns about personal loans made by Adam Minto and Tom Allsworth to an employee that appeared to be "unusual and required investigation".

It also identified other personal loans made to a number of senior managers and non-executive directors of the group, as well as loans from Adam Minto and Tom Allsworth to the distributors or their affiliates. As part of this, the investigation flagged loans or other investments of about £1 million to one of the distributors, adding that none of these loans had been disclosed.

Revolution Beauty has been working on a new set of audited accounts and plans to publish its full-year results by the end of April.