Management at Boohoo (BOO) says it hasn’t seen a fashion brand grow as quickly as PrettyLittleThing. Sales, which represent 44 per cent of the group total, were up 107 per cent in the year to February 2019. It's impossible to maintain growth rates of this magnitude as brands mature, but the online retailer's top-line growth is guided at 25-30 per cent for FY2020.
Sales growth in the retail sector isn't always matched by commensurate growth in profitability, so both shareholders and analysts will find satisfaction in the 190 basis point improvement in the gross margin, which fed through to a 49 per cent increase in cash profit to £84.5m.
It remains a highly cash-generative business model. Free cash flow more than doubled to £65.1m in the year, leading net cash to climb 43 per cent to £191m. This may have been aided by the net £52.6m increase in trade/payables over receivables.
However, those hoping for a dividend will be disappointed. Chief financial officer Neil Catto said the group had “lots of plans for investment”, whether through acquisitions or investment in existing brands.
Peel Hunt is forecasting adjusted pre-tax profits of £88.9m in FY2020, giving EPS of 5.5p. This compares with £76.3m and 4.15p in 2019.
BOOHOO (BOO) | ||||
ORD PRICE: | 228p | MARKET VALUE: | £2.66bn | |
TOUCH: | 228-228.5p | 12-MONTH HIGH: | 248p | LOW: 146p |
DIVIDEND YIELD: | nil | PE RATIO: | 70 | |
NET ASSET VALUE: | 22p | NET CASH: | £191m |
Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2015 | 140 | 11.1 | 0.80 | nil |
2016 | 195 | 15.7 | 1.10 | nil |
2017 | 295 | 30.9 | 2.20 | nil |
2018 | 580 | 43.3 | 2.78 | nil |
2019 | 857 | 59.9 | 3.27 | nil |
% change | +48 | +38 | +18 | - |
Ex-div: | na | |||
Payment: | na | |||