After four earnings upgrades and a share price that has more than trebled over the past 12 months, perhaps it was not a surprise to see Boohoo.com's (BOO) shares fall on results day. A year of stellar underlying top-line growth was boosted by the £5.9m acquisition of PrettyLittleThing (PLT) - a similar clothing website run by Umar Kamani, the son of Boohoo's founder and chief executive Mahmud Kamani.
But the marketplace is becoming increasingly competitive, and chief financial officer Neil Catto said operating leverage from higher revenue - boosted by a substantial proportion of non-sterling turnover (38 per cent) - had given the company room to lower prices. This contributed to a 320 basis point squeeze in gross margins to 54.6 per cent.
This year the group is guiding to a similar rate of top-line growth, although analysts have called their predictions conservative in light of the PLT deal and subsequent acquisition of US company NastyGal.
Analysts at Peel Hunt now expect pre-tax profit of £40m for the year ending February 2018, giving EPS of 2.8p, compared with £30.9m and 2.2p in FY2017.
BOOHOO.COM (BOO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183.3p | MARKET VALUE: | £2.06bn | |
| TOUCH: | 183.2-183.5p | 12-MONTH HIGH: | 190p | LOW: 45p |
| DIVIDEND YIELD: | nil | PE RATIO: | 84 | |
| NET ASSET VALUE: | 8.9p* | NET CASH: | £58.4m | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 67.3 | 3.2 | na | na |
| 2014 | 110 | 10.7 | 0.8 | nil |
| 2015 | 140 | 11.1 | 0.8 | nil |
| 2016 | 195 | 15.7 | 1.1 | nil |
| 2017 | 295 | 30.9 | 2.2 | nil |
| % change | +51 | +97 | +97 | - |
Ex-div: na Payment: na *Includes intangible assets of £35.4m, or 3.2p a share | ||||
