Boohoo looks sharp as profits surge
ONLINE fashion business Boohoo continues to step out in style as its half year results showed it is growing profits as well as sales.
The Manchester company, which floated on AIM in March said it has created 275 new jobs at its headquarters on Dale Street in the city centre and at its expanding warehouse in Burnley as it hired new staff for the latest phase in its international growth plan.
Having already announced 31% revenue growth to £67m in a pre-close trading statement last month, Boohoo said its adjusted EBITDA in the six months to the end of August was up 63% to £6.8m, while profits were up 23% to £4.5m.
Since floating at 50p Boohoo’s shares have fallen by around 14% – but most of this has been to a change in sentiment in the City towards online businesses – and there is little doubt that the travails of larger rival Asos, which has had a torrid 2014, has dragged Boohoo lower. The shares rose 1.16 or 0.5p to 43.5p.
Reflecting on the results Boohoo’s joint chief executives Mahmud Kamani and Carol Kane, said: “We are delighted with the results achieved during our first six months as a public company. We have grown revenues whilst continuing to lay the foundations for future growth.
“Since our IPO we have invested in the business significantly. Developments include the completed new mezzanine floor in the Burnley warehouse, a new warehouse management system and opening foreign language sites in Spain, Germany and most recently Italy as well as the launch of a fully responsive site to improve our mobile offering.”
They said international growth and continuing success in its largest market – the UK – remained the group’s focus.
“During the current quarter we have managed our marketing spend and growth during the implementation of the warehouse management system and the launch of the fully responsive mobile website. Following the successful execution of these key initiatives, our marketing spend has again increased in line with our targets and we continue to trade in line with market expectations for the full year.”
Boohoo said it had seen 47% growth in revenues in the UK. Growth in Europe was grew by 43% on the back of the launch of new foreign language websites in Spain and Germany. It said a slowdown in the rest of the world of 11% was driven by currency headwinds and, on a constant currency basis, rest of the world grew by 1% over the period.
The company said that in the 12 months to the edn of Ausgust it had grown customer numbers by 700,000 to 2.7 million. Its websites registered 145 million sessions in the 12 months to 31 August 2014, up 36% on the previous 12 months.
