Revolution Beauty shares glitter after it emerges from FCA probe
London-listed cosmetics firm Revolution Beauty told investors this morning that it is no longer under investigation by the City’s main market watchdog.
The Financial Conduct Authority has notified the firm that it will “take no further action”, meaning the probe was over, Revolution said in an announcement to the stock exchange.
The FCA’s scrutiny of the Camden-based company began in July 2023. It covered Revolution’s founders, Adam Minto and Tom Allsworth. Both were told in November 2024 that the investigation into them was complete, with no action taken. The remainder of the probe into the firm is now over, with the same outcome.
In 2022, Revolution missed the deadline to file annual earnings after concerns were raised by auditors. Revolution brought in independent investigators to look into the problems over what it then referred to as “a number of key audit areas” and the scrutiny applied to “the validity of certain commercial arrangements” according to company statements at the time.
Its stock was suspended from trade on London’s AIM exchange for a while in 2022 after the accounts were late, in line with policy. It was also in technical breach of its banking arrangements, but lenders remained supportive.
Regulatory scrutiny covered issues including potentially overstated sales and personal loans or other investments made by the founders to distributors of Revolution products.
The firm also changed accounting practices over product inventory ahead of a trading update in May 2022, without informing auditors in advance. After some revisions, the changes were deemed appropriate, but changed accounting provisions for 2022 and the previous two years.
Both Minto and Allsworth stepped away from day-to-day involvement in the business. There was a highly public boardroom battle in the wake of the delayed accounts.
Major investor Boohoo, the owner of the Debenhams brand, sought to overhaul management. Such a move was agreed in the summer of 2023, and settled the spat with two top-level departures. Bob Holt resigned as chief executive and Derek Zissman as chair.
Both of Revolutions founders are now back with the the business.
The company’s chairman, Iain McDonald said on Friday: “It is fitting to receive this news from the FCA at a time when Tom and Adam are back involved in the business and have reinvigorated it with a clear strategy. The early signs that this strategy is working are very encouraging, and the future is much brighter for the Revolution brand.
“We are pleased to report that the FCA has ceased its investigation into Revolution Beauty Group plc and that no action will be taken against the Company or its founders. The Company has cooperated fully with the FCA for the last three years and has taken on board any comments with a constructive spirit implementing a wider range of governance and best practice.”
Revolution made pioneering use of social media and influencers, including SophDoesNails. It is also known for its cruelty-free cosmetics policy, refusing to sell in countries that require animal testing.
Its early backers included The Hut Group, whose spun off Ingenuity business line owns City PM, alongside Boohoo.
Revolution floated in July 2021, in a move which valued it at £495 million and 160p per share.
At Thursday’s closing price, Revolution had a market cap of £37.4m. The stock strode 20 per cent higher on Friday, to 5.16p.