Fashion e-tailer Boohoo (BOO) has a lot of making up to do. The fast-fashion website only floated in late 2014 before issuing a surprise profit warning in January this year. In response, the share price nearly halved. But a strong set of half-year results could be just the thing to get the group back on track.
Group revenues increased nearly 40 per cent at constant currency, fuelled by particularly strong performances in the Australian and US markets. Revenues in the UK grew 30 per cent, which the group credited to a stellar first quarter. An initial trial of the wholesale operation is also progressing well and management plans to add more wholesale clients during the second half of the financial year.
A weak euro weighed on consumer demand in Europe, eroding sales growth to a relatively modest 19 per cent. But if you strip out the currency effects, European sales were up by just over a third on the 2014 half year. Meanwhile, cash profit margins dipped to 8.4 per cent (from 10.1 per cent last year), reflecting increased promotional activity and investments in marketing to help drive first-half sales growth.
Analysts at Investec Securities expect pre-tax profit of £14.8m for the current financial year, giving EPS of 1p, compared with £12m and 9.4p in the year ended 28 February 2015.
| BOOHOO (BOO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 34p | MARKET VALUE: | £376m | |
| TOUCH: | 33.25-34p | 12-MONTH HIGH: | 51p | LOW: 21p |
| DIVIDEND YIELD: | nil | PE RATIO: | 37 | |
| NET ASSET VALUE: | 6.4p | NET CASH: | £60m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 67.2 | 4.5 | 0.29 | nil |
| 2015 | 90.8 | 6.3 | 0.45 | nil |
| % change | +35 | +39 | +55 | - |
