Interim Results

RNS Number : 1782U
boohoo.com plc
14 October 2014
 



For Immediate Release                                                         14 October 2014

 

 

 

 

boohoo.com plc - Interim results for the six months to 31 August 2014

 

"The Global Fashion Leader for a Social Generation"

 

£000

6 months ended     31 August 2014

6 months ended     31 August 2013

Change

 

Revenue

67,197

51,431

31%

Gross profit

41,843

29,588

41%

  Gross margin

62.3%

57.5%

480bps

Operating profit

4,326

3,737

16%

EBITDA (adjusted)(2)

6,794

4,179

63%

Profit before tax

4,500

3,673

23%







pro forma(1)


Gross profit

41,843

33,484

25%

  Gross margin

62.3%

65.1%

(280)bps

EBITDA (adjusted)(2)

6,794

7,884

(14)%

(1): Adjustment to 31 August 2013 to reflect direct sourcing by boohoo.com plc, not via (now discontinued) related party companies;

(2): EBITDA (adjusted) is pre exceptional costs of £1.2m and share based payment costs of £0.4m

 

Highlights for the six months to 31 August 2014

·     Revenue up 31% (36% CER(3))

UK up 47%, rest of Europe up 43% (51% CER), rest of world down 11% (up 1% CER)

Rest of Europe and rest of world revenue represents 32% of total revenue

·     Gross margin 62.3%, up 480bps

·     EBITDA (adjusted) £6.8m, reflecting investment in overhead to support future growth

·     Acceleration of growth in Q2 and trading in line with expectations for the full year

·     2.7m active customers(4), up 33% on prior year

·     New responsive website improving mobile offering  (57% of sessions)

·     International growth accelerated through roll-out of foreign language websites including Spain, Germany and most recently Italy

·     Investment in warehouse increasing sq. ft. capacity by 33%

·     Successful implementation of new warehouse management system

·     Strong balance sheet with net cash of £56m

 

 (3): CER designates Constant Exchange Rate translation of foreign currency revenue

 (4): Active customers defined as having shopped in the last year

 

Mahmud Kamani and Carol Kane, joint CEOs, commented:

 

"We are delighted with the results achieved during our first six months as a public company.  We have grown revenues whilst continuing to lay the foundations for future growth.

 

Since our IPO we have invested in the business significantly. Developments include the completed new mezzanine floor in the Burnley warehouse, a new warehouse management system and opening foreign language sites in Spain, Germany and most recently Italy as well as the launch of a fully responsive site to improve our mobile offering.

 

Our focus remains on further expanding our international footprint while growing sales in the UK. During the current quarter we have managed our marketing spend and growth during the implementation of the warehouse management system and the launch of the fully responsive mobile website.  Following the successful execution of these key initiatives, our marketing spend has again increased in line with our targets and we continue to trade in line with market expectations for the full year."

 

Investor and Analyst Meeting

 

A meeting for analysts will be held at the office of Buchanan, 107 Cheapside, London, EC2V 6DN on 14 October 2014 commencing at 9.30am. boohoo.com plc's Interim Results 2014 are available at www.boohooplc.com.

 

For further information:

 

boohoo.com plc

Mahmud Kamani, Joint Chief Executive

Carol Kane, Joint Chief Executive

Neil Catto, Chief Financial Officer

Benjamin Robertson, Investor Relations

 

c/o Buchanan Tel: +44 (0)20 7466 5000

 

 

 

ben.robertson@boohoo.com

Tel: +44 77 6851 1056

 

Buchanan - Financial PR adviser

Richard Oldworth

Helen Chan

Gabriella Clinkard

 

Tel: +44 (0)20 7466 5000

boohoo@buchanan.uk.com

Zeus Capital - Nominated adviser and broker

Nick Cowles

Andrew Jones

John Goold

 

 

Tel: +44 (0)161 831 1512

 

Tel: +44 (0)20 7533 7727

About boohoo.com

 

"24/7 Global Fashion"

 

Keeping one step ahead of the trends or making a subtle style change is easy with boohoo.com and with up to 100 pieces hitting the site every day and a new collection each week, boohoo.com never stops - it's 24/7 fashion at its best.

From the UK's best kept fashion secret to one of the fastest growing own brand, international e-tailers, boohoo.com has quickly evolved into a global fashion leader of its generation.  Combining cutting-edge, aspirational design with an affordable price tag, boohoo.com has been pushing boundaries since 2006 to bring its customers all the latest looks for less.

 

www.boohoo.com

www.boohoo.com/newz

fr.boohoo.com

www.boohoo.com/europe

www.boohoo.com/sweden

de.boohoo.com

www.boohoo.com/usa

www.boohoo.com/denmark

it.boohoo.com

www.boohoo.com/canada

www.boohoo.com/norway

nl.boohoo.com

www.boohoo.com/aus


es.boohoo.com

 

 

Financial highlights


6 months to 31 August 2014

6 months to 31 August 2013

Change


£000

£000


Revenue

67,197

51,431

+31%

Gross profit

41,843

29,588

+41%

 Gross margin

62.3%

57.5%

+480bps

EBITDA (adjusted)

6,794

4,179

+63%

Profit before tax and exceptional items

5,727

3,733

+53%

4,500

3,673

+23%

Pro forma gross profit

41,843

33,484

+25%

 Pro forma gross margin

62.3%

65.1%

-280bps

Pro forma EBITDA (adjusted)

6,794

7,884

-14%

Cash at period end

55,817

5,318

+950%

Earnings per share

0.29p

0.25p

+18%

 

 

 

 

Prior year pro forma numbers include the net profit that was made by related party companies supplying inventory to boohoo.com. Since Q4 2013, this profit is wholly realised by boohoo.com, which now sources all product directly and not through related parties.

 

EBITDA (adjusted) is calculated as profit before tax, interest, depreciation and amortisation, share based payment charges and exceptional costs.

       


Business review

 

Performance during the six months to 31 August 2014

We achieved revenue of £67m, up 31% (36% CER) for the six months ended 31 August 2014.  Our largest market continues to be the UK, where revenue for the six months grew by 47%.  Revenue in the rest of Europe grew by 43% (51% CER), supported by the launch of new foreign language websites in Spain and Germany.  A slowdown in the rest of the world of 11% was driven by currency headwinds and, on a constant currency basis, rest of the world grew by 1% over the period.  In the second quarter, revenue growth accelerated to 37% (41% CER), with the UK up 50%, rest of Europe up 50% (61% CER) and rest of world stable (up 8% CER). This compares to first quarter growth of 24% (28% CER). Adjusted EBITDA was £6.8m for the period, reflecting significant investment in overhead to support future growth.

Fashion

Our constantly expanding product range and rapid reaction to fashion trends has underpinned the successful growth of new product categories. We launch up to 100 new styles every day, offering our customers the very latest fashions and trends from a range of over 9,000 styles. The combination of high fashion, great value prices and effective marketing encourages customers to shop on every occasion on a regular basis.

Sales of women's tops have grown by 63% and now represent 15% of sales, our second largest category after dresses, which account for 34% of total sales.  Fashion playsuits and jumpsuits have been very popular and by identifying and targeting the trend with a great product offering and marketing support, we have achieved sales growth of 188% in that category. Other popular categories which have grown well include jackets and coats, with sales increasing by 59%, jeans up by 46% and footwear up by 39%. We are becoming a recognised destination for swimwear, which has continued to out-perform, with sales growth of 107%. The Boutique collection, a higher price point offering of ladies wear, grew by 74%. Our menswear line, first introduced in autumn 2013, grew by 46% and represents 3.6% of total sales and has significant opportunity for future growth.

Our women's plus size range, boohoo plus, has performed very well, with first half sales of £1.3m, growing strongly month on month, and represents the great potential of this market globally. We were voted "Best for Curves" in Cosmopolitan Magazine's fashion awards this September. This autumn, we will be launching a petite range and boohoo fit, adding to our expanded ranges which include boohoo man, boohoo nights and boohoo edit.

Our autumn/winter collection has received excellent reviews from the fashion press following the launch in mid-September and continues to offer great fashion at affordable prices from diverse collections, building on the successes of the first half.

Marketing

Over the summer, our marketing campaign "#experienceeverything" was highly successful, driving sales growth and new customer acquisition. The messaging was delivered through TV advertising across our key markets, as well as above the line advertising on the underground, digital display, banners and video, blogger outreach, and direct mail.

This autumn we launched our campaign "#wherewestand" on social media, which we expect to be highly engaging for our young customers. The campaign has a strong music element which will be shown on TV, and the adverts in London Underground and fashion magazines. The advert went into the UK top 10 adverts on Shazam within the first week of launch. We have developed a number of associations with music artists, which are highly complementary to the interests of many of our target consumers. Such associations enable us to extend our reach and appeal to a larger audience. Other social media activity includes international blogger, Nadia Aboulhosn, who will be supporting our plus size range with live tweets in the autumn.

International marketing activity in the second half will include TV advertising in Scandinavia, Germany, Netherlands and Italy. In the USA, a "pop-up shop" in New York will support a series of promotional events, including a student ambassador programme and college fashion weeks in several states. In Australia, the summer campaign will include outdoor advertising, blogger outreach, on-line activity and TV advertising.

Marketing expenditure was 14.5% of revenue in the first half this year compared to 13.8% in the first half of last year. This year, marketing expenditure in our rapidly expanding European markets in start-up phase drove the increase over the previous half year.

 

Customer interaction

We served 2.7 million customers in the 12 months to 31 August 2014, up from 2.0 million in the 12 months to 31 August 2013. The boohoo.com websites registered 145 million sessions in the 12 months to 31 August 2014, up 36% on the previous 12 months. On social media, we have 0.4 million followers on both Twitter and Instagram, 2.9 million Facebook fans and 1.4 million views recorded on YouTube. We have recently launched our platforms on up and coming social media sites Snapchat and Tunepics and we also feature on Pinterest.

We take great pride in our customer service and measure continuously our response times to ensure we attain the highest standards. We monitor reviews on external customer review sites and in September 2014 our Trustpilot rating from over a 100,000 reviews was 4 star, which is best in class. Our multi-lingual advisers respond to emails in foreign languages to service our French, German and Spanish websites.

We fulfilled 2.7 million orders in the first half, up 40% on the same period last year, and despatched 7.2 million units, up 53%, from our wide range of products. We are deploying the very latest technology to modify the website content for selected customer groups and to monitor the effectiveness of different presentations of the website, so we can quickly improve customer engagement and conversion. This same technology also allows us to personalise the website to the customer's gender and shopping preferences.

The new warehouse management system now in operation will enable us to move from an 8pm to a 9pm cut-off for next day delivery and an increasing number of Sunday deliveries will be available in autumn. Customer communication of shipping progress is now active via email updates. Delivery times to European countries have been reduced and local returns centres have been created to consolidate returns and reduce the cost. Future plans include alternative collection and return points (e.g. collect+) and text messaging to enable delivery point and time to be amended by the customer during transit.

Technology

We added Spanish and German language websites on our in-house developed platform in May and July respectively, following on from the French language website launched in November 2013. Monthly sales in France and Germany have increased by over 250%. The pricing strategy in Spain is being revised to improve momentum in that market. An Italian language website was launched on the same in-house platform shortly after the period end on 12 September 2014.

Scandinavian currency payment options were added in June 2014 and we have seen a significant increase in conversion rate and sales in the region. In September 2014, we added the Ideal payment option for our Dutch customers and launched a website in English to tailor product and marketing offerings to the Netherlands.

The main website was refreshed in June with a white design, which has been well received by customers. A responsive (meaning the display will automatically adjust to the screen size of the device used) mobile website went live in September 2014, greatly improving the customer experience, with 57% of sessions now executed using mobile and tablet devices.

We utilise two different website platforms, one being externally developed and managed and the other internally. This strategy provides security and flexibility, enabling us to deliver local look, language, feel and pricing to international sites in a relatively short timescale.



 

International expansion

International sales grew by 5% (16% CER) compared to the first half of last year. Our strategy in providing foreign language sites, multiple payment methods, currency options and locally optimised marketing strategies continues to drive growth.

In the rest of Europe, we saw a continued acceleration in growth through the first half with second quarter growth of 50% (61% CER) up on first quarter growth of 36% (41% CER).  We are particularly pleased with the performance in France which has seen revenues grow in excess of 250% over the period. The recently launched German language site has driven a tripling of daily sales and revenue is building, although from a much smaller base.

In Australia, which has suffered from adverse currency movements, we have appointed a country marketing manager and reduced prices whilst maintaining gross margins in excess of 60%. We have seen a return to year on year growth on a sterling and local currency basis in the latter part of the first half. The number of internet sessions in Australia has increased by 45% in the first half, seeing boohoo.com move up several places in internet rankings to number 5 on Hitwise. We are launching a new collection for the Australian market called the edit.

The US market continued to grow modestly.  Our strategy is to concentrate marketing in the New York district and drive demand through highly visible and effective marketing campaigns and word of mouth recommendations by building on our strategic influencer relationships. We anticipate this will drive awareness across city boundaries, due to the influence of the region on the fashion buying US public.

Warehouse

Our warehouse investment programme is on track, with the completed construction of mezzanine floors within the existing warehouse increasing capacity by 56,000 sq. ft..  Work has commenced on the building of a £7m extension to the existing warehouse and is scheduled for completion in spring 2015, giving us extra capacity to support up to £500m of gross sales.  The 110,000 sq. ft. extension will have multiple floors and will add 670,000 sq. ft. of storage space, enough to store 8 million units, compared to the current 2.7 million unit capacity.

The new £1.5m warehouse management system went live successfully in early September.  The system will improve efficiency through optimisation of the pickers' routes using Wi-Fi arm mounted units, improving order management, fulfilment accuracy and stock control.

We have converted a large number of warehouse operatives' contracts from agency to permanent and revised our pay structure to attract and retain capable and experienced workers to meet the demands of our expanding business. Agency staff are engaged to support the operation in peak periods, optimising the efficient use of labour resources.

People

Our talented management team has been augmented by the appointments of a HR director and a marketing director. We have also continued to build our e-commerce, marketing and IT functions with new starters to provide the resource for our international expansion programme, with focus on marketing and improving our knowledge of country-specific consumer and competition insight. Our customer service team has grown with the addition of multi-lingual advisors to service our foreign language websites. Office headcount has increased by 101 and warehouse headcount by 174 through new recruits and agency workers converted to permanent contracts. We now employ a total of 752 people.



 

Financial review

The first half has delivered overall revenue growth and profits in line with our budget and expectations.

 

Sales revenue by geographical market


6 months to 31 August 2014

6 months to 31 August 2013

Change

Change


£000

£000


CER

UK

45,605

30,931

+47%

+47%

Rest of Europe

8,719

6,081

+43%

+51%

Rest of world

12,873

14,419

-11%

+1%


67,197

51,431

+31%

+36%

 

At constant exchange rates [CER], all regions showed growth compared with the same period last year. Growth in sterling terms has been impacted by currency headwinds across our international business, especially in Australia. In the latter part of the second quarter, Australia sales in sterling and on a local currency basis, returned to growth following the revised pricing strategy.

 

KPIs


6 months to 31 August 2014

6 months to 31 August 2013

Change

Active customers(1)

2.7 million

2.0 million

+32.7%

Number of orders

2.7 million

1.9 million

+39.7%

Conversion rate to sale (2)

3.5%

3.3%

+20bps

Average order value(3)

£36.90

£37.56

-1.8%

Number of items per basket

2.68

2.45

+9.4%

 

(1)      Defined as having shopped in the past year

(2)      Defined as the percentage of orders taken to internet sessions

(3)      Calculated as gross sales including sales tax divided by the number of orders

Our business is continuing to attract new customers and retain existing customers, with active customer numbers increasing by 32.7% compared to a twelve month period one year ago. Conversion rates have increased to 3.5%. Average order value has seen a small decline of 1.8% to £36.90 as we have sought to keep our prices highly competitive and target product at price points most appealing to our young customers, which has also underpinned the growth in the number of items per basket increasing 9.4%

 



     

Consolidated income statement

 


Actual


Pro forma


6 months to 31 August 2014

6 months to 31 August 2013

Change


6 months to 31 August 2013

Change


£000

£000



£000


Revenue

67,197

 51,431

31%


51,431

31%

Cost of sales

(25,354)

(21,843)

16%


(17,947)

41%

Gross profit

41,843

 29,588

41%


 33,484

25%

Gross margin

62.3%

57.5%



65.1%









Distribution costs

(14,618)

(10,755)



(10,755)


Administrative expenses

(22,899)

(15,096)



(15,287)


Operating profit

4,326

 3,737

16%


 7,442

-42%








Finance income/(expense)

174

(64)



(64)


Profit before tax

4,500

 3,673

23%


 7,378

-39%















Calculation of EBITDA (adjusted)







Operating profit

4,326

 3,737



 7,442


Depreciation and amortisation

824

 382



 382


Share-based payments

417

-



-


Exceptional items

1,227

60



60


EBITDA (adjusted)

6,794

 4,179

63%


 7,884

-14%


 



 


In the table above, the pro forma results last year add to the reported results the profits that were made by related companies in supplying inventory to boohoo.com. From late 2013, boohoo.com sourced all its products direct from suppliers and not through related companies. The cost of personnel performing the sourcing activity in the related companies has also been added to the prior period reported figures to reflect the subsequent transfer of these employees to boohoo.com.

Reported gross margin rose from 57.5% to 62.3% due to direct sourcing of inventory from suppliers compared to the first half last year [H1], when a proportion of inventory came from related parties. The pro forma margin of 65.1% in H1 last year was higher than the margin of 62.3% this year because of a combination of factors, with roughly equal weighting: the increase this year in the proportion of UK sales, where margin is lower than in the international markets; adverse currency movements in international sales; and a small reduction in selling prices in the UK, driving growth and increased profits. In addition, the pro forma margin last year reduced from 65.1% in H1 to 62.8% for the full year, the latter being more comparable with H1 this year.

Distribution costs and administrative expenses have increased due to business expansion, higher marketing expenditure and investment in improved, more efficient systems, and in talented people to support the transition to a public company. Administration costs relating to corporate governance, finance and legal resources associated with the transition to plc amounted to an additional £1.1m of costs over the same period last year.

The exceptional items of £1.2m in H1 this year, included in administrative expenses, relate to IPO expenses. IPO expenses written off to share premium amounted to £12.6m.

EBITDA (adjusted) increased by 63% from £4.2m to £6.8m on an actuals basis and reduced from £7.9m to £6.8m on a pro forma basis.

 

Statement of financial position



At 31 August 2014

At 28 February 2014



£000

£000

Intangible assets


3,770

 3,052

Property, plant and equipment


7,037

 6,199

Deferred tax


121

 33

Non-current assets


10,928

 9,284





Working capital


(4,798)

(1,147)

Net financial (liabilities)/assets


(56)

 101

Cash and cash equivalents


55,817

5,411

Interest bearing loans and borrowings


(99)

(2,742)

Current tax liability


(1,291)

(1,147)





Net assets


60,501

9,760

 

Net assets have increased by £50.7m, driven by profits and the net IPO proceeds of £47.5m. Working capital has reduced primarily due to increased accruals for unbilled goods and services at the month end with increased trading activity.



 

 

Liquidity and financial resources

Free cash flow was £7.0m compared to £1.8m in H1 2013. Working capital requirements decreased: inventories increased due to the requirement to hold more products to serve our growing customer base; receivables decreased with payment of £1.1m related party receivables; and payables and accruals increased in line with trading activity. Capital expenditure was £2.4m as we have continued to invest in our warehouse and IT systems to support projected growth in trade. The net IPO proceeds were £47.5m and the closing cash balance was £55.8m.

 

Consolidated cash flow statement




 



 

6 months to 31 August 2014

6 months to 31 August 2013



£000

£000





Profit for the period


3,282

2,788





Depreciation charges and amortisation


824

382

Share-based payments charges


417

-

Tax expense


1,218

885

Finance (income)/expense


(174)

64

Increase in inventories


(1,317)

(539)

Decrease/(increase) in trade and other receivables


332

(944)

Increase in trade and other payables


4,793

416

Capital expenditure


(2,380)

(1,233)

Free cash flow


6,995

1,819





Net proceeds raised from IPO


47,515

-

Purchase of own shares by Employee Benefit Trust


(400)

-

Interest received/(paid)


174

(64)

Tax paid


(1,162)

(526)

Non cash charges and exchange differences


(73)

-

Proceeds from new loans


-

2,667

Dividends paid


-

(400)

Repayment of borrowings


(2,643)

(2,785)

Net cash flow


50,406

711





Cash and cash equivalents at beginning of period


5,411

4,607

Cash and cash equivalents at end of period


55,817

5,318





 



 

Outlook

 

Our focus remains on further expanding our international footprint while growing sales in the UK. During the current quarter we have managed our marketing spend and growth during the implementation of the warehouse management system and the launch of the fully responsive mobile website.  Following the successful execution of these key initiatives, our marketing spend has again increased in line with our targets and we continue to trade in line with market expectations for the full year.

 

 

Mahmud Kamani

Carol Kane

Neil Catto




Joint Chief Executive

Joint Chief Executive

Chief Financial Officer

 

 

13 October 2014

Unaudited consolidated statement of comprehensive income

for the 6 months ended 31 August 2014








Note


6 months to 31 August 2014

6 months to 31 August 2013

Year to

 28 February

2014




£000

£000

£000













Revenue

3


67,197

51,431

109,791

Cost of sales



(25,354)

(21,843)

(44,879)

Gross profit



41,843

29,588

64,912







Distribution costs



(14,618)

(10,755)

(24,290)

Administrative expenses



(22,899)

(15,096)

(30,289)

Other income

4


-

-

488

Operating profit



4,326

3,737

10,821







Finance income/(expense)



174

(64)

(84)

Profit before tax



4,500

3,673

10,737







Taxation



(1,218)

(885)

(2,310)







Profit for the period



3,282

2,788

8,427







Other comprehensive income for the period, net of income tax



Net fair value (loss)/gain on cash flow hedges



(73)

-

20

Total comprehensive income for the period



3,209

2,788

8,447







Earnings per share

6





Basic



0.29p

0.25p

0.75p

Diluted



0.29p

0.25p

0.74p

 

 

Unaudited consolidated statement of financial position

at 31 August 2014


Note


At 31

August

2014

At 31

August

2013

At 28

February

2014




£000

£000

£000

Assets






Non-current assets






Intangible assets



3,770

1,128

3,052

Property, plant and equipment



7,037

5,316

6,199

Deferred tax

7


121

33

33




10,928

6,477

9,284

Current assets






Inventories

8


11,112

7,379

9,795

Trade and other receivables

9


3,693

1,817

3,927

Financial assets



27

-

125

Cash and cash equivalents



55,817

5,318

5,411

Total current assets



70,649

14,514

19,258







Total assets



81,577

20,991

28,542







Liabilities






Current liabilities






Trade and other payables

10


(19,603)

(13,162)

(14,869)

Interest bearing loans and borrowings

11


(99)

(207)

(384)

Financial liabilities



(83)

-

(24)

Current tax liability



(1,291)

(1,006)

(1,147)

Total current liabilities



(21,076)

(14,375)

(16,424)







Non-current liabilities






Interest bearing loans and borrowings

11


-

(2,415)

(2,358)

Total liabilities



(21,076)

(16,790)

(18,782)







Net assets



60,501

4,201

9,760







Equity






Share capital

12


11,231

-

-

Share premium

12


551,591

-

-

Capital redemption reserve



100

-

100

Hedging reserve



(53)

-

20

EBT reserve



(429)

-

-

Reconstruction reserve



(515,261)

117

17

Retained earnings



13,322

4,084

9,623

Total equity



60,501

4,201

9,760

 

 

 

 

 

Unaudited consolidated Statement of Changes in Equity

for the 6 months ended 31 August 2014

 


Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Recon-struction reserve

Retained earnings

Total

equity


£000

£000

£000

£000

£000

£000

£000

£000

Balance as at 1 March 2014

-

-

100

20

-

17

9,623

9,760

Issue of shares

11,231

551,591

-

-

(29)

(515,278)

-

47,515

Purchase of shares by EBT

-

-

-

-

(400)

-

-

(400)

Share-based payment charge

-

-

-

-

-

-

417

417

Profit for the period

-

-

-

-

-

-

3,282

3,282

Fair value loss on cash flow hedges

-

-

-

(73)

-

-

-

(73)

Balance at 31 August 2014

11,231

551,591

100

(53)

(429)

(515,261)

13,322

60,501

 

 


Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Recon-struction reserve

Retained earnings

Total

equity


£000

£000

£000

£000

£000

£000

£000

£000

Balance as at 1 March 2013

-

-

-

-

-

117

1,696

1,813

Profit for the period

-

-

-

-

-

-

2,788

      2,788

Dividends

-

-

-

-

-

-

(400)

(400)

Balance at 31 August 2013

-

-

-

-

-

117

4,084

4,201

 

 


Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Recon-struction reserve

Retained earnings

Total

equity


£000

£000

£000

£000

£000

£000

£000

£000

Balance as at 1 March 2013

-

-

-

-

-

117

1,696

1,813

Profit for the period

-

-

-

-

-

-

8,427

8,427

Fair value gains on cash flow hedges

-

-

-

20

-

-

-

20

Redemption of preference shares

-

-

100

-

-

(100)

(100)

(100)

Dividends

-

-

-

-

-

-

(400)

(400)

Balance at 28 February 2014

-

-

100

20

-

17

9,623

9,760

 

 

Unaudited consolidated cash flow statement

for the 6 months ended 31 August 2014

 


Note


6 months to 31 August 2014

6 months to 31 August 2013

Year to

28 February

2014




£000

£000

£000

Cash flows from operating activities






Profit for the period



3,282

2,788

8,427

Adjustments for:






Depreciation charges and amortisation



824

382

979

Share-based payment charge



417

-

-

Gain on sale of property, plant and equipment



-

-

(60)

Transfer from hedging reserves



(73)

-

20

Finance (income)/expense



(174)

64

84

Tax expense



1,218

885

2,310

Profit before tax before changes in working capital and provisions


5,494

4,119

11,760







Increase in inventories

8


(1,317)

(539)

(2,955)

Decrease/(increase) in trade and other receivables

9


332

(944)

(3,179)

Increase in trade and other payables

10


4,793

416

2,147







Cash generated from operations



9,302

3,052

7,773







Interest paid



174

(64)

(84)

Tax paid



(1,162)

(526)

(1,810)







Net cash inflow from operating activities



8,314

2,462

5,879







Cash flows from investing activities






Acquisition of intangible assets



(1,024)

(621)

(2,762)

Acquisition of tangible property, plant and equipment



(1,356)

(612)

(1,875)

Proceeds from sale of property, plant and equipment



-

-

60

Net cash used in investing activities



(2,380)

(1,233)

(4,577)







Cash flows from financing activities






Proceeds from the issue of ordinary shares



300,000

-

-

Payment of convertible loan notes to shareholders of ABK Limited


(239,899)

-

-

Share issue costs written off to share premium



(12,586)

-

-

Purchase of own shares by EBT



(400)

-

-

Proceeds from new loan



-

2,667

199

Redemption of preference shares



-

-

(100)

Dividends paid



-

(400)

(400)

Repayment of borrowings



(2,643)

(2,785)

(197)

Net cash generated from/(used in) financing activities



44,472

(518)

(498)







Increase in cash and cash equivalents



50,406

711

804







Cash and cash equivalents at beginning of period



5,411

4,607

4,607

Cash and cash equivalents at end of period



55,817

5,318

5,411

 

 

Notes

(forming part of the interim report and accounts)

1              Basis of preparation

The interim financial statements for the six months ended 31 August 2014 have been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. The interim financial statements should be read in conjunction with the group's Report and Financial Information for the year ended 28 February 2014. The group's Report and Financial Information, which is not statutory financial statements, was extracted from audited financial statements of the subsidiaries prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. Since the company did not acquire the group until after the balance sheet date, those financial statements include the results of the subsidiaries as if they were always part of the group. boohoo.com plc acquired the group on 14 March 2014 simultaneous with its flotation and admission to the AIM listing of the London Stock Exchange.

 

The directors have considered the accounting policy that should be applied in respect of the consolidation of the group formed upon acquisition of the group on admission. They have concluded that the transaction described above represented a combination of entities under common control and in accordance with IAS 8 "Accounting policies, changes in accounting estimates and errors" have considered FRS 6 "Acquisitions and mergers" under UK GAAP, which the directors believe reflects the economic substance of the transaction. Under this standard, assets and liabilities are recorded at book value, not fair value, intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented. Therefore, although the group reconstruction did not take place until 14 March 2014, the consolidated financial statements are presented as if the group structure had always been in place, using merger accounting principles.

 

boohoo.com plc is not required to produce its first annual report and accounts until the year ended 28 February 2015. The interim financial statements contained in this report do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The audited results of the company's subsidiaries for the year ended 28 February 2014 have been filed with the Registrar of Companies. The auditors' reports on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under s498(2) or s498(3) of the Companies Act 2006.

 

The group's business activities together with the factors that are likely to affect its future developments, performance and position are set out in the Business Review. The Business Review describes the group's financial position, cash flows and borrowing facilities.

 

The interim financial statements are unaudited and were approved by the board of directors on 13 October 2014.

 

Going concern

The interim financial statements have been approved on the assumption that the group remains a going concern. The following paragraph summarises the issues and basis on which the directors have reached their conclusion.

 

The directors have reviewed the group's cash flow forecasts for a period exceeding 12 months from the date of authorisation of these interim financial statements. Following this review, the directors have formed a judgement that, at the time of approval of the interim financial statements, the group has sufficient resources to continue operating for the foreseeable future including the funding of necessary capital expenditure. For the reasons noted above, the directors continue to prepare the financial statements on a going concern basis.

 

Accounting policies

The interim financial statements have been prepared in accordance with the accounting policies set out in the group's Report and Financial Information for the year ended 28 February 2014, except for the addition of share based payments in accordance with IFRS 2.

 

Share based payments

The group operates an equity settled share based payment plan. The fair value of the shares is determined using the Black Scholes option pricing model and is expensed in the statement of comprehensive income on a straight-line basis over the vesting period after allowing for an estimate of the number of shares that are expected to vest. The level of vesting is reviewed annually and the expense adjusted to reflect any change in estimates.

 

2              Principal risks and uncertainties

The board considers the principal risks and uncertainties which could impact the group over the remaining six months of the financial year to 28 February 2015 to be unchanged from those set out in the group's Report and Financial Information for the year ended 28 February 2014, which in summary are: economic risk; competition risk; fashion and consumer demands risk; systems and technical risk; supply chain risk; reputational risk; financial risk; people risk; and loss of key facilities.

 

These are set out in detail on pages 14 to 15 of the group's Report and Financial Information for the year ended 28 February 2014, a copy of which is available on the group's website, www.boohooplc.com.

 

 

3              Revenue

Sales revenue by geographical market


6 months to 31 August 2014

6 months to 31 August 2013

Year to

28 February 2014



£000

£000

£000

UK


45,605

30,931

70,992


8,719

6,081

13,058

Rest of world


12,873

14,419

25,741



67,197

51,431

109,791

                                               

4              Other income



6 months to 31 August 2014

6 months to 31 August 2013

Year to

28 February 2014



£000

£000

£000

Gift to group from director for benefit of employees


-

-

450

Waiver of loan from director in ABK Limited


-

-

38



-

-

488

 



 

5              Profit before tax

 

Profit before tax is stated after charging:



6 months to 31 August 2014

6 months to 31 August 2013

Year to

28 February 2014



£000

£000

£000

Operating lease rentals for buildings


290

189

401

Depreciation


518

263

643

Amortisation


306

119

336

Share-based payment charge


417

-

-

Exceptional items - IPO costs


1,227

-

-

Exceptional items - capital re-organisation fees


-

60

375

 

 

6             Earnings per share

 

Basic earnings per share is calculated by dividing profit after tax by the weighted average number of shares in issue during the period. Own shares held by the Employee Benefit Trust are eliminated from the weighted average number of shares. The prior year comparatives are stated using the number of shares in issue on the IPO date.

 

Diluted earnings per share is calculated by dividing the profit after tax by the weighted average number of shares in issue during the period, adjusted for potentially dilutive share options.



6 months to 31 August 2014

6 months to 31 August 2013

Year to

28 February 2014

Weighted average shares in issue for basic earnings per share


1,120,041,882

1,120,210,360

1,120,210,360

Dilutive share options


13,827,152

12,844,000

12,844,000

Weighted average shares in issue for diluted earnings per share


1,133,869,034

1,133,054,360

1,133,054,360






Earnings (£000)


3,282

2,788

8,427

Basic earnings per share


0.29p

0.25p

0.75p

Diluted earnings per share


0.29p

0.25p

0.74p

 



 

 

7              Deferred tax



Depreciation in excess of capital allowances

Share-based payments

Total



£000

£000

£000

At 1 March 2013


33

-

33

At 31 August 2013


33

-

33

At 28 February 2014


33

-

33

Recognised in statement of comprehensive income


-

88

88

At 31 August 2014


33

88

121

 

8              Inventories


At 31

August

2014

At 31

August

2013

At 28

February

2014


£000

£000

£000

Finished goods

11,112

7,379

9,795

 

The value of inventories included within cost of sales for the period was £25,354,000 (2013: £21,843,000). An impairment provision of £342,000 (2013: £1,073,000) was charged to the statement of comprehensive income.

 

 

9              Trade and other receivables


At 31

August

2014

At 31

August

2013

At 28

February

2014


£000

£000

£000

Amounts due from related party undertakings

51

548

1,156

Other receivables

2,542

648

1,610

Prepayments and accrued income

1,100

621

1,161


3,693

1,817

3,927

 

Other receivables represent amounts due from credit card sales which were received within a few days of the invoice date in accordance with normal bank clearance times, advance payments to suppliers and a deposit paid to a credit card organisation.



 

10           Trade and other payables


At 31

August

2014

At 31

August

2013

At 28

February

2014


£000

£000

£000

Trade payables

6,315

5,183

8,469

Amounts owed to related party undertakings

-

343

192

Other payables

121

62

42

Accruals and deferred income

10,775

6,605

4,859

Taxes and social security payable

2,392

969

1,307


19,603

13,162

14,869

 

11           Interest-bearing loans and borrowings

This note provides information about the contractual terms of the group's interest-bearing loans and borrowings, which are measured at amortised cost.


At 31

August

2014

At 31

August

2013

At 28

February

2014


£000

£000

£000

Non-current liabilities




Secured bank loans

-

2,415

2,358

Current liabilities




Secured bank loans

-

185

185

Other loans

99

22

199


99

207

384

 

Terms and debt repayment schedule


Currency

Nominal interest rate

Year of

maturity

At 31

August

2014 

At 31

August

2013

At 28

February

2014





£000

£000

£000








Secured bank loan

£

2.75%

2027

-

2,600

2,543

Other loan

£

0%

2014

99

22

199





99

2,622

2,742

The secured bank loan was repaid in April 2014.



 

12           Share capital and share premium


At 31

August

2014 

At 31

August

2013

At 28

February

2014


£000

£000

£000

Authorised and fully paid




1,123,132,360 Ordinary shares of 1p each

11,231

-

-

Share premium

551,591

-

-


562,822

-

-

 

 

13           Related party transactions

 

There are no material related party transactions during the six months to 31 August 2014, other than the purchase of 1 million shares for £400,000 by the Employee Benefit Trust for which the cash was provided by the company. Payments received from related party debtors amounted to £1,105,000 and payments made to related party creditors were £192,000, these payments being in respect of balances in existence at 28 February 2014.

                                                                                                                       


This information is provided by RNS
The company news service from the London Stock Exchange
 
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