With online fashion retailer Asos (ASC) having delivered a shock profit warning earlier this month, it was with some relief that peer boohoo.com (BOO) - which floated in March - reported cash profits of £16m with these maiden full-year figures. That beat analysts' consensus estimates and represented an 86 per cent year-on-year hike (on a pro-forma basis).
As with Asos, boohoo's sales have been hit by the strong pound and revenue from its rest of the world division slumped by a fifth in the three months to the end of May. That currency-related weakness hit online traffic in Australia in particular. Nevertheless, boohoo maintained its gross margin at around 63 per cent, while UK and European sales continued to surge ahead.
That resilience reflects a retail model designed to minimise markdowns. The thinking runs that boohoo's fashion-minded target market of 14-to-35 year-olds are far less price conscious than older consumers. Marketing also matters. The marketing budget through to the February year-end represented 14 per cent of revenues, but management boosted that to 17.7 cent during the key spring season. Accordingly, May's revenue growth was double that recorded in March.
Broker Investec Securities expects adjusted pre-tax profit of £17.8m for 2015, giving EPS of 1.3p (from £14.9m and 1.1p in 2014).
| BOOHOO.COM (BOO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 48p | MARKET VALUE: | £539m | |
| TOUCH: | 48-48p | 12-MONTH HIGH: | 85p | LOW: 42p |
| DIVIDEND YIELD: | nil | PE RATIO: | 48 | |
| NET ASSET VALUE: | 0.87p* | NET CASH: | £2.6m | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 67 | 3.2 | 0.5 | nil |
| 2014 | 110 | 10.7 | 1.0 | nil |
| % change | +63 | +224 | +100 | - |
Ex-div: - Payment: - *Includes intangible assets of £3m, or 0.27p a share | ||||
