City round-up: Boohoo; B&M; Flowtech Fluidpower

Manchester online fashion retailer Boohoo has today published terms of reference regarding the independent review of its Leicester supply chain.

It refers to claims the company used suppliers that operated throughout the coronavirus lockdown and paid below minimum wages, claims Boohoo denies.

Subsequently it launched its own independent review, led by Alison Levitt QC.

It said: “The purpose of this independent review is to consider the group’s obligations and relevant duties of care in relation to the workforce in its Leicester supply chain.

“The group will act decisively on the independent review’s findings and look to embed its recommendations into its strategic planning to help restore confidence in the Leicester garment industry and increase transparency for all of our stakeholders.”

The review’s key objectives are:

• To investigate the allegations made in relation to the Leicester supply chain and determine whether they are well-founded;
• If they are, to consider the extent to which the group monitored its supply chain in Leicester and had knowledge of the allegations;
• To consider the group’s compliance with the relevant law; and
• To make recommendations for the future in response to those findings.

The group will provide an update on the findings of the report with its half year results for the six months ending August 31, 2020, on September 30.

Brian Small, deputy chairman and senior independent director, said: “We are pleased to share the terms of reference for the upcoming independent review into our Leicester supply chain.

“We believe this demonstrates how seriously we, as a board, are treating the recent allegations into our supply chain. The group is committed to delivering the highest standards of ethics, compliance and transparency.”

::

B&M European Value Retail, the Liverpool-based discount retailer, said it is on target to beat consensus forecasts for its six month results, in a trading update today.

On July 1, 2020, it announced it had made a strong start to the new financial year and, against a highly uncertain economic backdrop and continued impacts from COVID-19, was well placed to continue to grow profitably in the UK and continue to develop and prove the proposition in France.

The group’s current expectation for the six months to September 26, 2020 for adjusted EBITDA is that it is likely to be in the range of £250m to £270m. The average analysts’ consensus forecast is £208.1m.

Today’s statement said there remains considerable uncertainty in relation to both the progression of COVID-19 and the economic outlook and it is, therefore, hard to predict trading levels for the second half of the year.

A more detailed update at the half year results announcement is scheduled for November 12, 2020.

::

Skelmersdale hydraulics specialist, Flowtech Fluidpower, reported a 22% fall in interim revenues, in a trading update for the period to June 30, today.

Total turnover of £46.6m compared with £59.6m the previous year. However, net debt reduced from £18.8m in 2019, to £14.6m.

The business said the second quarter was the most materially affected by COVID-19, down 33% against prior year.

April’s revenue was the most impacted, down 41% on a like-for-like basis, as a large proportion of its customers were closed. However, their gradual return has resulted in an improving trend, with the like-for-like revenue down 34% and 25% in May and June, respectively.

All key customers have now returned, the supply chain is functioning effectively, and the trends remain encouraging, with July revenue approximately 15% ahead of the same point in June.

As a result, Flowtech has welcomed back a number of UK furloughed employees and now have only 43 furloughed compared with a peak of 189 in April.

Today’s update said: “We reacted quickly to the unforeseen demands caused by COVID-19 and managed our trading and cash performance effectively.
“Entering the second half of the year we look forward to improving trading conditions. This, coupled with our ongoing restructuring activities, should result in a profitable and cash generative second half of 2020.

The group is planning to release its half-year results on Tuesday, September 8.