Boohoo back on front foot say bosses

ONLINE fashion retailer Boohoo has hailed a year of progress with international expansion, investment in people and its platform driving growth.

Financially, results for the year to February 28 from the AIM-listed Manchester company showed the impact of a weaker second half in its largest market, the UK, which caused a profit warning in January as sales slumped amid heavy discounting by high street rivals.

Revenue rose 27% to £139.8m, adjusted EBITDA grew 16% to £14.1m while operating profits before exceptional items rose 6% from £11.2m to £11.8m. At the bottom line pre-tax profits were up 3% to £11.06m.

Boohoo said it had created more than 300 jobs over the period, 97 at its head office on Dale Street in the city centre, and 235 at its expanded Burnley warehouse. The group now employs 784 people.

Other highlights included a 29% increase in active customers to more than three million. It said too that consumers  have responded well to new product ranges, with boohoo Petite and boohoo FIT, launched alongside the ” rapidly growing” boohoo Plus range for larger sizes.

Joint chief executives Mahmud Kamani and Carol Kane said: “We are pleased to report a year of significant progress on so many fronts.  While delivering a result in line with our revised guidance, we have also taken major steps operationally to ensure boohoo is prepared for the anticipated growth ahead.
 
“We continue to invest in the brand as we develop in key markets (UK, Australia, USA, Ireland and France) where we see the greatest long term growth potential. All the while we are constantly improving the customer experience and our country specific pricing remains agile to ensure we stay on top of our game.

“As we focus on growth and creating value for our shareholders, we have made the investment to support the business including new systems, an expanded warehouse and enlarged and stronger teams.”

Looking ahead the pair added: “We remain confident in our proven business model and in the continued development of the online fashion market globally in which we are steadily increasing our market share.
 
“Having increased marketing spend towards levels seen in the first quarter last year (as a percentage of sales) we have seen a good start to the new financial year with improved momentum in the UK.  Our international momentum has continued, reflecting greater focus on our key markets. Overall, the business continues to trade in line with management’s expectations.”

During the year under review, Boohoo’s UK revenues grew 33% – a buoyant 47% in the first half, and 22% in the second half as a result of stiff competition and the warm autumn season.

Revenue in the rest of Europe grew by 39%, despite the impact of the weakening euro.  Rest of the world growth was also impacted by adverse currency movements in the first half, when revenues declined by 11%, but recovered in the second half after implementation of a re-pricing strategy in Australia. Second half growth in rest of the world was 29%, and the resultant full year growth was 7%.

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