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Boohoo H1 sales surge, pre-tax profit jumps 83 percent

By Prachi Singh

25 Sep 2019

Boohoo Group revenue for the half year increased by 43 percent on both constant and current exchange basis to 564.9 million pounds (704 million dollars). The company’s adjusted EBITDA was 60.7 million pounds (75.6 million dollars), an increase of 53 percent on the first half of the previous year, while adjusted EBITDA margin reached 10.8 percent compared to 10 percent in the previous year. The company said, profit before tax was 45.2 million pounds (56.3 million dollars), an increase of 83 percent and adjusted diluted earnings per share were 2.91p, up 46 percent on the prior half year, while basic earnings per share rose to 2.55p, an increase of 80 percent.

Commenting on the company’s performance, John Lyttle, Boohoo Group CEO, said in a statement: “We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded 1 billion pounds in the last 12 months. We enter the second half of the year well‐placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well‐invested infrastructure, will deliver further marke t share gains.”

Boohoo confirms full year forecast

As announced on September 5, 2019, Boohoo added that group revenue growth for the year to February 29, 2020 is expected to be 33 percent to 38 percent, with adjusted EBITDA margin for the financial year to remain at around 10 percent, reflecting anticipated investments across the financial year into the three brands acquired by the group in the first half year. The company has reiterated its medium term guidance to deliver revenue growth of at least 25 percent per annum and adjusted EBITDA margin of around 10 percent.

Boohoo including BoohooMan recorded Revenue for the half year of 281 million pounds (350.3 million dollars), up 34 percent on the first half of the previous year, with growth in all our key focus markets. The company said, growth in the UK continued in the first half year, while international growth remained strong, especially in the USA and northern Europe. Gross margin increased by 20bps to 53.6 percent, driven by an improved product offering and refinement of the customer proposition. Active customer numbers over the last 12 months increased by 20 percent to 8.4 million and conversion rate to sale increased from 3.1 percent to 3.3 percent of sessions.

PrettyLittleThing, the company added, achieved revenue growth of 41 percent to 237.6 million pounds (296 million dollars) with growth across all territories, especially the US and French markets. Gross margin decreased to 55.3 percent compared to 57.3 percent in the previous year. Active customer numbers over the last 12 months increased by 43 percent to 5.7 million.

Nasty Gal’s revenue growth across all territories drove overall revenues by 148 percent increase to 43.9 million pounds (54.7 million dollars). Revenue growth in the USA, the largest single market for the brand, continued, while UK and International markets also witnessed strong momentum. Gross margin dropped to 54.2 percent compared to 59 percent in the first half of 2019. Active customer numbers, over the last 12 months at Nasty Gal increased by 112 percent to 1.5 million.

Commenting on Boohoo’s results in a statement, senior market analyst at City Index, Fiona Cincotta, said: "Boohoo has yet again surprised the market to the upside, this time by showing that it's having no problem converting the kind of bumper sales growth it revealed three weeks ago into profits. The big jump in profit numbers shows that Boohoo isn't growing sales at the expense of margins, which is no mean feat given the pressure being exerted on consumer confidence by Brexit uncertainty.

“Costs have been kept under control and the company's celebrity-based marketing efforts are clearly hitting the spot, justifying the expense. Adjusted operating margins in the first half, at 10.8 percent, are tracking favourably compared to the company's annual guidance of around 10 percent, boding well for the full-year result."

Picture:Boohoo media gallery