Tears of joy as Boohoo profits leap

ONLINE fast fashion retailer Boohoo has reported a strong set of half year results with revenues surging 35% and profits up nearly 40%.

Hailing a period of investment, customer recruitment, job creation and international growth in the six months to the end of August, the Manchester-based AIM-listed company said revenues had risen 35% from £67.2m to £90.7m, driven by a strong domestic market (up 30%) and the rest of the world (+65%). But for the weak euro, growth in Europe would have been 34% rather than the 19% declared.

Adjusted EDBITDA was up 12% at £7.6m, while pre-tax profits came in 39% higher at £6.2m.

Boohoo, which said it had completed a multi-million pound extension to its Burnley warehouse, now has 3.5 million active customers, up 32% on this time last year.

Given that 2015 started on a flat note with a shock profit warning, Boohoo has got back on track admirably.

Joint chief executives Mahmud Kamani and Carol Kane, said: “We are pleased to report a successful first half, with strong revenue growth driven by acquiring new customers through our investments in price, promotions and marketing spend.

“We continue to invest in our brand internationally and our strategy to focus on key markets where we see the greatest growth potential remains unchanged.

Largely as a result of the extended warehouse entering service in August, Boohoo has added more staff and now employs 876 people, up from 784 in February. Thanks to the addition of 270,000 sq ft of extra space, total warehouse capacity now stands at 525,000sq ft, equivalent in size to over six football pitches.

Looking ahead, the company said a trial of supplying other etailers with Boohoo branded products had “performed well”, and this would be extended in the second half.

“During the first half of the year we have invested in acquiring new customers with revenue growth exceeding our initial expectations. We now anticipate revenue growth for the full of year of between 30% and 35%,” the company said.

The only less than positive message was regarding a possible squeeze on margins: “During the second half we will continue to look at opportunities to invest in building customer lifetime value and market reach which may impact margins in the short term.  We are trading in line with current market expectations for EBITDA.

“We remain focussed on driving growth in our business and we are pleased with the start we have made to the AW15 season.”