An auditor’s tick was worth hundreds of millions of dollars on Tuesday to shareholders in Cettire (ASX:CTT), the controversial online luxury goods operator.
The company finally produced its audited 2023-24 accounts, and the shares leapt by more than 76% in value by mid-afternoon, as the company shook off a month of investor scepticism about its operations and the veracity of its 2023-24 annual results.
Cettire confirmed its audited results after releasing its annual report on Tuesday, and its shares accelerated, rising 565 points in just over an hour, continuing this momentum throughout the afternoon.
In fact, Cettire pointed out that the audit from Grant Thornton was unqualified, meaning there were no questions about the company’s controversial revenue recognition policy, which had recently worried investors.
By issuing the audited accounts and annual report, Cettire confirmed its previously unaudited 2023-24 results, with net profit down by a third to $10.5 million, while revenue was up 78% to $742.3 million.
Specifically, investors and analysts were sceptical of the company’s revenue recognition policy. This scepticism led to Cettire becoming the most shorted stock on the ASX.
Cettire’s release of its unaudited full-year figures in late August left investors underwhelmed and increasingly concerned about its luxury goods sales model and how it accounted for actual sales — particularly, when a purchase from a supplier became a sale for Cettire.
The Grant Thornton auditors said they had investigated the process and found nothing wrong.
On Tuesday, the company released the audited results as part of its annual report, with no change to its revenue policy.
Cettire's chair, Robert East, said in the annual report that the company would continue to invest in opportunities to deliver profitable revenue growth while remaining self-funding.
Additionally, Cettire appointed Caroline Elliott as a non-executive director. East said Elliott’s experience in retail and tech would complement the skills of the current board. Ms Elliott is also a board member of Kelsian, the listed bus and transport company.
