Beauty and cosmetics products
Revolution Beauty believes the settlement with former CEO Adam Minto is a ‘fair’ one / Image source: Adobe
  • Near-£3 million settlement reached with ex-CEO
  • Revolution sees settlement as ‘fair’
  • Makeup firm may face legal action from Chrysalis

Small cap cosmetics firm Revolution Beauty (REVB:AIM) has reached a near-£3 million settlement with co-founder and former CEO Adam Minto, one that seemingly draws a line under the accounting scandal that delayed its 2022 results and sent the shares up 4% to 31p on Monday.

Having considered its options and legal advice received, Revolution Beauty’s board believes the settlement is a ‘fair’ one, although it may not be the end of the makeup, skincare and hair product company’s immediate troubles.

Revolution Beauty could still face potential legal action from former shareholder Chrysalis Investments (CHRY), which says it has ‘certain potential claims’ against the company for actions of ‘deceit, negligent misstatement and/or misrepresentation’.


Minto has agreed to pay the group £2.9 million to settle allegations he breached his fiduciary duties to Revolution Beauty, which is seeking to put its recent troubles behind it.

This follows on from an agreed settlement the beauty retailer reached last December with its former chair Tom Allsworth regarding various issues.

Earlier in the year, Revolution Beauty was also involved in a battle with shareholder Boohoo (BOO:AIM) over senior management, a fight which the latter subsequently won.

The fresh settlement relates to the events that led to the delay of the audit of the makeup and skincare brand’s full year 2022 results and the suspension of its shares on AIM during Minto’s time at the helm.

The matter has been settled with ‘no admission or acceptance of liability by either party’.

Minto will pay the £2.9 million in six annual instalments, with the first payment of £483,333.35 due on 28 March 2024; if an instalment is not paid on time, then he will be charged interest at 8% per annum.

Revolution Beauty chairman Alistair McGeorge commented: ‘We are very pleased to have reached an agreement with Adam. This, together with the revised payment schedule agreed in December 2023 for the acquisition of Medichem, means we can now focus on the future. We look forward to providing an update on our strategy at our upcoming Capital Markets Event on 8 February 2024.’

JTC touches new 12-month high on strong outlook


AJ Bell investment director Russ Mould explained that with all these issues now resolved, Revolution Beauty should have been free to focus on growing the business.

‘In theory, this could have also been the point at which Boohoo considers the company to be de-risked and therefore ripe for a takeover,’ said Mould.

‘Boohoo has built up a 27.13% stake since 2022, taking advantage of share price weakness in Revolution Beauty and seeing it as a way to strengthen an existing sales relationship,’ added Mould.

‘It wants to be a bigger player in the beauty market so there is logic to owning Revolution Beauty. It could save money over the long term by getting rid of Revolution Beauty’s stock market listing and running the two companies on one platform. Allsworth and Minto each own 15.35% of Revolution Beauty and might welcome a cash exit to help fund other ventures.’

However, the threat of potential legal action by Chrysalis Investments against Revolution Beauty ‘throws a spanner in the works, with the former having bought £45 million worth of shares in 2021 and sold them a year later for £5.7 million’, noted Mould.

‘Chrysalis’ statement last week implies Revolution Beauty may have misled investors during the period it was a shareholder. While formal legal proceedings have not been initiated, the prospect of this happening would certainly stop Boohoo from wanting to make a takeover until the matter has gone away.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.


Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Issue Date: 05 Feb 2024