- Chair Mahmud Kamani has led a round of director share purchases
- Boohoo announced this week that its auditor PwC would be stepping down
Boohoo (BOO) directors have swooped in and capitalised on a slump in the fast fashion retailer’s share price, as the company continues to suffer from fallout related to working practices in its supply chain.
Boohoo said at the start of the week that it was searching for a new auditor as PwC, its auditor since 2014, prepares to end its work for the retailer. Boohoo shares fell by a fifth following its announcement, and remained under pressure as speculation mounted over the identity of PwC’s successor. PwC declined to comment on its motive for ending its relationship with Boohoo.
Boohoo also wouldn't answer questions about a Telegraph report that suggested it had been rebuffed by a number of major audit firms as part of its search for a replacement. The situation is reminiscent of Frasers’ (FRAS) hunt for an auditor last year, after Grant Thornton decided not to seek re-election for its audit. The retailer was subsequently unable to secure the services of any of the Big Four accounting firms, and officially went without an auditor for a short period. Frasers, then known as Sports Direct, eventually appointed mid-tier auditor RSM.
A spate of director purchases disclosed the day after Boohoo’s audit revelation have helped to steady the share price. Chair Mahmud Kamani has bought £729,210 in shares, taking his position in the company to 12.5 per cent. Deputy chairman Brian Small has bought £25,020 in shares, while Catherine Catto, the wife of chief financial officer Neil Catto, has purchased £14,999 in stock.
The dealings have allowed Mr Kamani in particular to increase his stake in the company at a time of concern over its governance and related share price volatility. Boohoo shares surged in September after it published an independent review into its supply chain failings, but the company must do more to win back the confidence of investors, who have endured a rocky ride of late. Finding an auditor joins revamping the supply chain at the top of Boohoo’s list of priorities. Hold at 255p.
Last IC View: Hold, 382p, 30 Sep 2020
| Buys | |||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) | Comments |
| Boohoo | Mahmud Kamani (ch) | 20 Oct 20 | 243 | 729,210 | Residual interest of 12.5% |
| Mind Gym | Octavius Black (ceo) | 16 Oct 20 | 90 | 500,000 | Jointly purchased with Joanne Cash, chair. Joint interest of 55.8% |
| Mind Gym | Sebastian Bailey | 16 Oct 20 | 90 | 500,000 | |
| Superdry | Julian Dunkerton (ceo) | 16 Oct 20 | 150.28 | 137,984 | |
| River and Mercantile | David Hanratty | 19 Oct 20 | 155 | 93,000 | Purchased by PCA |
| Urban Logistics REIT | Nigel Rich | 16 Oct 20 | 139 | 41,700 | |
| Smiths Group | Pam Cheng | 15 Oct 20 | 1,357 | 40,709 | American depositary receipts, converted from US$ |
| Bigblu Broadband | Christopher Mills | 14 Oct 20 | 80 | 40,000 | Purchased by PCA |
| MJ Hudson | Odi Lahav | 14 Oct 20 | 42.81 | 34,168 | Average price |
| Allied Minds | Bruce Failing | 15 Oct 20 | 38.5 | 30,800 | |
| Boohoo | Brian Small | 20 Oct 20 | 250.2 | 25,020 | |
| Sabre Insurance Group | Geoff Carter (ceo) | 14 Oct 20 | 247.62 | 24,762 | |
| Signature Aviation | Mark Johnstone (ceo) | 19 Oct 20 | 237.15 | 24,051 | |
| Boohoo | Neil Catto (cfo) | 20 Oct 20 | 257.48 | 14,999 | Purchased by PCA |
| Sells | |||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) | Comments |
| Ashmore | Mark Coombs | 15 Oct 20 | 383 | 19,150,000 | |
| Ashmore | Mark Coombs | 16 Oct 20 | 381 | 19,050,000 | |
| Jardine Matheson | Percy Weatherall | 16 Oct 20 | 3,169 | 3,168,540 | Sold by PCA, converted from US$ |
| Judges Scientific | Alex Hambro | 19 Oct 20 | 5,175 | 103,500 |
