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boohoo.com plc (BOO)

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Wednesday 25 April, 2018

boohoo.com plc

Final Results

RNS Number : 0012M
boohoo.com plc
25 April 2018
 

For Immediate Release

25 April 2018

                                               

This announcement contains inside information

 

boohoo.com plc - final results for the year ended 28 February 2018

 

"Leading the fashion eCommerce market"

 


2018

2017

Change


£ million

£ million


Revenue

579.8

294.6

+97%

Gross profit

306.4

160.8

+90%

Gross margin

52.8%

54.6%

-180bps

Adjusted EBITDA(1)

56.9

35.6

+60%

% of revenue

9.8%

12.1%

-230bps

Adjusted EBIT(2)

50.4

31.2

+61%

% of revenue

8.7%

10.6%

-190bps

Adjusted profit before tax(3)

51.0

31.9

+60%

Profit before tax

43.3

30.9

+40%

Adjusted diluted earnings per share(4)

3.23p

2.20p

+47%

Diluted earnings per share

2.71p

2.16p

+25%

Net cash(5) at year end

133.0

58.4

+£74.6m

 

 

 

Financial Highlights

Group

·     Revenue £579.8 million, up 97% (92% CER(6))

·     Strong revenue growth across all geographies with UK up 95% and international up 99%

·     Strong balance sheet with net cash of £133.0 million (2017: £58.4 million), following £50 million share placing and with robust operating cash flow of £76.2 million (2017: £36.1 million)

 

boohoo

·     Revenue £374.1 million, up 32% (29% CER)

·     Gross margin 51.2%, down 330bps, driven by planned investments in the customer proposition (retail gross margin 53.4% (2017: 56.1%))

 

PrettyLittleThing

·     Revenue £181.3 million (up 228% on 12-month comparative period)

·     Gross margin 55.2% (retail gross margin 57.2% (2017 12-month comparative: 57.3%))

 

Nasty Gal

·     Revenue £24.4 million

·     Revenue and customer growth both strong from start-up on 1 March 2017

·     Gross margin 59.6%

 



 

Operational Highlights

Group

·     Distribution centre extension build complete, fit-out on schedule, sufficient for over £1 billion future group operation

 

boohoo

·     6.4 million active customers(7), up 22% on prior year

·     Transition to new website platform complete across all markets, with stability, flexibility and performance improvements

·     Significant investments in customer service improving the customer proposition

PrettyLittleThing

·     3.0 million active customers, up 128% on prior year

·     Increasing momentum in brand awareness driving growth in customer numbers

·     High profile celebrity associations driving traffic and international expansion

 

Nasty Gal

·     0.4 million active customers

·     Product range built to over 5,000 lines in 12 months

·     International appeal outside of US growing, increasing revenue

·     New offices in Manchester to support a growing operational team and in Los Angeles focussing on marketing

 

Outlook and guidance

Trading in the first few weeks of the 2019 financial year has made a strong start. Group revenue growth for the next financial year (FY19) is expected to be 35% to 40% with adjusted EBITDA margin between 9% to 10% and capital expenditure of £50 to £60 million.

Looking beyond the current year we will continue to lead the market on value, service and proposition in all our key geographies. Whilst this will require a continued investment in people and infrastructure, we believe that the benefits of our investments in marketing and warehouse automation will generate economies of scale to allow us to drive sales growth of at least 25%, whilst maintaining a 10% EBITDA margin.

 

Mahmud Kamani and Carol Kane, joint CEOs, commented:

"The group made great progress during the year, integrating a new company, PrettyLittleThing, and a new brand, Nasty Gal, into the boohoo group. Revenue from boohoo continued to grow strongly, whilst there has been an exceptional performance from PrettyLittleThing, and Nasty Gal exceeded our estimates in its first year. Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector. Our international business showed higher growth rates and we are pleased with its gathering momentum.

Our strategy will remain focussed on providing the best fashion at great prices coupled with excellent customer service. To this end we have a plan of continuous investment in systems and technology to ensure we offer an optimal online shopping experience. International expansion will continue as we add more country-specific websites, refine our brands' customer proposition and raise brand awareness through marketing and social media. Our extended distribution centre, which will have a significant element of automation to drive efficiency savings, is scheduled for operational use in early 2019.

We have announced this morning that PrettyLittleThing is to move into its own warehouse in the first half of the FY19 financial year. This brings incremental sales capacity in addition to that in our Burnley operations, will help underpin our infrastructure needs and add further operational flexibility for the group. It represents a significant milestone as we develop a distribution network capable of generating £3 billion of net sales globally, in line with our vision to lead the fashion eCommerce market."



 

Investor and analyst meeting

 

A meeting for analysts will be held today at the office of Buchanan, 107 Cheapside, London, EC2V 6DN commencing at 9.30am. boohoo.com plc's 2018 results are available at www.boohooplc.com.

 

A live audio webcast will be available at 9.30am via the following link:

http://vm.buchanan.uk.com/2018/boohoo250418/registration.htm

 

A replay will subsequently be available from 12 noon via the same link. 

 

Enquiries


boohoo.com plc


Neil Catto, Chief Financial Officer

Tel: +44 (0)161 233 2050

Alistair Davies, Investor Relations

Tel: +44 (0)161 233 2050

Clara Melia, Investor Relations

Tel: +44 (0)20 3289 5520



Zeus Capital - Nominated adviser and joint broker


Nick Cowles/Andrew Jones (Corporate Finance)

Tel: +44 (0)161 831 1512

John Goold/Benjamin Robertson (Corporate Broking)

Tel: +44 (0)20 3829 5000



Jefferies Hoare Govett - Joint broker


Nick Adams/Max Jones

Tel: +44 (0)20 7029 8000



Buchanan - Financial PR adviser

[email protected]

Richard Oldworth/Madeleine Seacombe/

Tel: +44 (0)20 7466 5000

Gemma Mostyn-Owen


 

 

Notes:

(1) Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, share-based payment charges and option gain on PrettyLittleThing acquisition (2017).

(2) Adjusted EBIT is calculated as profit before tax, interest, share-based payment charges, amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets and option gain on PrettyLittleThing acquisition (2017).

(3) Adjusted profit before tax is calculated as profit before tax, excluding share-based payment charges, amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets and option gain on PrettyLittleThing acquisition (2017).

(4) Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets, share-based payment charges and option gain on PrettyLittleThing acquisition (2017).

(5) Net cash is cash less borrowings.

(6) CER designates Constant Exchange Rate translation of foreign currency revenue, which gives a truer indication of the performance in international markets by removing year-to-year exchange rate movements when local currency sales are converted to sterling.

(7) Active customers defined as having shopped in the last year.

 

About boohoo.com plc

 

"Leading the fashion eCommerce market"

 

Founded in Manchester in 2006, the group started life as boohoo.com, an inclusive and innovative brand targeting young, value-orientated customers. For over 10 years, boohoo has been pushing boundaries to bring its customers up-to-date and inspirational fashion, 24/7. boohoo has grown rapidly in the UK and internationally, expanding its offering with range extensions into menswear through boohooMAN. 

 

In early 2017 the group extended its customer offering through the acquisitions of the vibrant fashion brand PrettyLittleThing, and free-thinking brand Nasty Gal. United by a shared customer value proposition, our brands design, source, market and sell great quality clothes, shoes and accessories at unbeatable prices. This investment proposition has helped us grow from a single brand, into a major multi-brand online retailer, leading the fashion eCommerce market for 16 to 30-year-olds around the world. Today the boohoo group sells to 9.8 million customer accounts across all its brands in almost every country in the world. 

 

 

Forward looking statements and disclaimer

 

Certain statements included or incorporated by reference within this announcement may be, or may be deemed to be "forward-looking statements" in respect of the boohoo group's operations, performance, prospects and/or financial condition. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words and words of similar meaning as "anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "intends", "plans", "potential", "targets", "goal" or "estimates".

By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except as required by applicable law or regulation (including to meet the requirements of the AIM Rules, MAR, the Prospectus Rules and/or the FSMA), the company expressly disclaims any responsibility or obligation to publish any updates or revisions to any forward-looking statements resulting from new information, future events or otherwise whether following any change to reflect events or circumstances after the date of this announcement. Nothing in this announcement should be construed as a profit forecast.

 

Disclaimer

 

This announcement and information communicated orally in relation to it does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in boohoo.com plc (the "company"), nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares or other securities of the company. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser.

Statements in this announcement reflect the knowledge and information available at the time of its preparation. Liability arising from anything in this announcement shall be governed by English law. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

All subsequent oral or written forward-looking statements attributed to boohoo.com plc or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above.  All forward-looking statements contained in this announcement are based on information available to the directors of the company at the date of this announcement, unless some other time is specified in relation to them, and the posting or receipt of this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date.

 



 

Performance during the year

Review of the business

"An outstanding year, with the integration of PrettyLittleThing and Nasty Gal adding to the already successful boohoo brand and introducing a step-change to the revenue and profits of the group."

Overview


2018

2017

Change


£000

£000


Revenue

579,800

294,635

+97%

Gross profit

306,355

160,829

+90%

Gross margin

52.8%

54.6%

-180bps

EBITDA

53,663

35,073

+53%

% of revenue

9.3%

11.9%

-265bps

Profit before tax

43,313

30,945

+40%

Diluted earnings per share

2.71

2.16p

+25%

Net cash(1) at year end

133,047

58,420

+£74.6m

Underlying:




   Adjusted EBITDA(2)

56,932

35,563

+60%

   % of revenue

9.8%

12.1%

-230bps

   Adjusted EBIT(3)

50,403

31,232

+61%

   % of revenue

8.7%

10.6%

-190bps

   Adjusted profit before tax(4)

51,031

31,869

+60%

   Adjusted diluted earnings per share(5)

3.23p

2.20p

+47%

 

 

(1) Net cash is cash less borrowings.

(2) Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, share-based payment charges and option gain on PrettyLittleThing acquisition (2017).

(3) Adjusted EBIT is calculated as profit before tax, interest, share-based payment charges, amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets and option gain on PrettyLittleThing acquisition (2017).

(4) Adjusted profit before tax is calculated as profit before tax, excluding share-based payment charges and amortisation of acquired intangible assets and option gain on PrettyLittleThing acquisition (2017).

(5) Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired intangibles, share-based payment charges and option gain on PrettyLittleThing acquisition (2017).

 

The group made great progress during the year, integrating a new company, PrettyLittleThing, and a new brand, Nasty Gal, into the boohoo group. Revenue from boohoo continued to grow strongly, whilst there has been an exceptional performance from PrettyLittleThing, and Nasty Gal exceeded our estimates in its first year. Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector. Our international business showed much higher growth rates and we are particularly pleased with its gathering momentum. The group despatched 22 million orders to 9.8 million active customer accounts across all its brands, achieving total revenue of £579.8 million.

We raised £50 million from a share placing during the year, for investment in building and automation of our new distribution centre and, combined with significant cash generation by the group, our net cash balance rose to £133.0 million. Capital investment during the year amounted to £46.4 million, much of this being for our distribution centre extension, with capital commitments at the end of the year of £28 million.

                                                                                               

Distribution centre

Our group distribution centre in Burnley has been enlarged by a new building, with a footprint of 166,000 square feet, now complete and undergoing fit-out ready for use in early 2019. A key aspect of the new facility will be the introduction of a significant amount of automation, which will greatly improve picking efficiency and have a short payback period on the capital invested. The enlarged facility will be sufficient for an operation capable of generating over £1 billion in net sales. We have also opened substantial employee welfare facilities at the distribution and customer services centre, which includes a gym, exercise studio, leisure facilities and subsidised canteen. PrettyLittleThing will relocate its inventory to a separate third-party managed warehouse facility in the first half of FY19. This brings incremental sales capacity in addition to our Burnley operations, will help underpin PLT's infrastructure needs and adds further operational flexibility for the group as we continue to invest in our future distribution network. Project planning for future storage requirements is well under way with a project team working on the next phase of distribution centre development.

 

boohoo and boohooMAN

Performance

Revenue for the year increased to £374.1 million, up 32% (29% CER) on the previous year.

Revenue growth in the UK, the largest geographic market, has been robust and international growth very strong as the reach and appeal of the brand increases. Additional breadth in the product range has contributed to revenue growth, with several new product categories introduced in the year.

Product

boohoo's comprehensive range of clothing, footwear, accessories and beauty products has continued to grow during the year, with new additions and greater depth in ranges. Our extended women's size ranges of plus size and curve, petite and tall have performed extremely well and new additions such as premium, soft tailoring, lingerie, maternity and athleisure have contributed to revenue growth and to attracting a more diverse customer base. Menswear has continued to perform very well, with a rapidly growing and more comprehensive product line. Introductions this year included big and tall sizing, an extended activewear line and a MAN logo range.

Our offering changes daily, with hundreds of new styles added and the very latest fashions appearing within days or weeks of trends being spotted by our fashion experts and offered to our customers at affordable prices. The breadth of the range makes boohoo a destination to which customers keep returning to find their desired items with ease.

Marketing

Marketing activity is focussed on a successful formula of a mix of media, including social media influencers, bloggers, TV, outdoor, email, students and digital acquisition channels. Our Instagram site has greatly increased its reach, with followers doubling this year and content much increased. Our social media presence continues to grow and we now have 4.8 million followers on Instagram, 2.7 million Facebook likes and 0.6 million followers on Twitter.

Customer interaction

Active customer numbers over the last 12 months increased by 22% to 6.4 million. Conversion rate to sale increased from 4.0% to 4.3% of sessions, when measured on website statistics alone, in order to remove duplicated sessions on the app.  Order frequency remained unchanged with customers placing an order with us, on average, 2.13 times in 12 months, whilst the number of items per basket rose 6% to 3.06.

We have continued to refine the customer proposition with free returns and next day delivery available in more overseas markets. Future developments will include more country-specific websites and even faster customer service response times.

boohoo Premier, offering unlimited shipping for an annual fee and introduced in late 2016 in the UK, has continued to attract many new subscribers. We have introduced several new payment types in overseas markets, in line with our aim to attain best-in-class customer service.

Technology

All our remaining regional websites were successfully migrated to the new website platform during the year. The new platform has proven to have superior stability, with no downtime during the peak Black Friday and pre-Christmas periods, greater flexibility for development and faster response times for customers.

We have continued to increase our use of cloud platforms for scalability and resilience of our systems. A continual programme of app improvement and development is ongoing, including roll-out of the app to more international markets. We have now implemented an image recognition capability.  The first implementation of this technology allows customers to upload an image and find similar products from the boohoo range.  We are experimenting with other uses of this in, for example, outfit builder, shop the look and other uses. boohooMAN launched apps for the UK, US and Australian markets during the year. All our sites are optimised for mobile browsing, whilst mobile device use continues to rise and now accounts for 73% of sessions.

 

PrettyLittleThing

Performance

PrettyLittleThing ("PLT") achieved outstanding revenue growth of 228% over the comparable 12-month period and 209% in the like-for-like two-month post-acquisition period. The UK is the brand's largest market, where revenue growth and market share have increased significantly. International sales growth has been exceptionally strong, up 364%. The international markets have enormous potential to grow given our relatively small market share in large opportunity markets including the USA, France and the rest of continental Europe. Gross margin has remained strong at 55.2% (2017 12-month comparative: 56.8%), with retail gross margin at 57.2% (2017 12-month comparative: 57.3%).

Product

PLT brings the latest and most relevant celebrity looks at affordable prices to our customers, with a choice of over 12,500 styles and new items available daily. We have widened our product range in the year to include higher price point premium categories, more beauty products and, from September 2017, a shape range. We launched two celebrity collections in the year with Kourtney Kardashian (October 2017) and Olivia Culpo (August 2017), which attracted significant global media interest across both traditional and social media channels. Our new curve, shape, plus and petite ranges have proved popular with customers in all markets, and we have also introduced an activewear range.

Marketing

Social media advertising is highly effective in reaching our target audience and we have seen the number of our followers increase significantly across all social media platforms. Our celebrity collaborations with Kourtney Kardashian, Kylie Jenner and Olivia Culpo have also been instrumental in raising brand awareness globally and the brand is recognised by the younger generation as one of the hottest in the UK.

Customer interaction

The number of country-specific websites increased to seven following the addition of our first foreign language website in French, with more foreign language websites set to be launched in the 2019 financial year. We have also strengthened our overall customer proposition and during the 2019 financial year there will be a continued focus on enhancing the customer experience, with the launch of fully tracked returns portals planned for Q1 of the financial year across multiple international markets.

Active customer numbers over the last 12 months increased by 128% to 3.0 million. We have 1.2 million followers on Facebook (an increase of 51% in 12 months), 0.3 million followers on Twitter, 3.3 million Instagram followers (an increase of 106% in 12 months), 2.0 million YouTube views as well as a presence on several other social media channels.

Significant investment has been made, and continues to be made, in our customer services team, enabling us to deliver market leading customer service across multiple platforms.

Technology

We have continued to invest in our technology infrastructure to enable us to support the growth of the business, as well as to offer the best quality customer proposition. Development has been underway throughout the year to enhance our websites to support the increasing product range and make the customer's shopping experience as seamless as possible. We have continued to invest in the development of our app which operates on both iOS and Android, with 20% of all customer visits coming via the app in the 2018 financial year, up from 10% in the prior period.

 

Nasty Gal

Performance

From a start-up in March 2017, revenue has increased steadily and strongly throughout the year. Revenue for the year amounted to £24.4 million, which was greater than our expectations. It is gratifying to see the growth in sales outside of the USA, where Nasty Gal predominated under its previous ownership, as this is highly encouraging in indicating the international appeal of the brand. We have invested heavily in marketing to increase brand awareness and re-energise the brand, concentrating on the key markets of the USA and UK initially.

We opened new offices in Los Angeles for our US marketing team and in Manchester for the expanding design, product and buying teams.

Product

Nasty Gal's distinctive product offering covers higher price points than those of boohoo and targets the confident girl who is not afraid to be herself. From a new start-up in March of this year, the range has increased to a comprehensive offering of clothing, shoes and accessories. We expect continued momentum in revenue growth as the range widens and the brand is reactivated through targeted marketing.

Marketing

The marketing strategy has focussed on building and extending the number of bloggers and influencers and staging key media events to re-engage customer interest and promote brand loyalty. A pop-up store in London generated much interest, contributing to a growing awareness of the brand in the UK.

Customer interaction

Nasty Gal has six country and regional websites, developed since start-up in March 2017 and Android and iOS apps for the UK, US and the Australian markets.

On social media we have 2.6 million followers on Instagram, 1.3 million Facebook likes and 0.2 million followers on Twitter.

 



 

From strength to strength

Financial review

"The group has achieved a strong performance with revenues and profits increasing in all territories."

 

Group revenue by brand


2018

2017

Change

Change


£000

£000


CER

boohoo

374,115

283,378

+32%

+29%

PrettyLittleThing

181,269

11,257

-

-

Nasty Gal

24,416

-

-

-


579,800

294,635

+97%

+92%

The sales revenue in 2017 above for PrettyLittleThing is for the two months to 28 February 2017 following acquisition. For comparative purposes, PrettyLittleThing's revenue for the twelve months to 28 February 2017 was £55.3 million.

 

Group revenue by geographical market

 


2018

2017

Change

Change


£000

£000


CER

UK

355,614

181,981

+95%

+95%

Rest of Europe

66,281

34,735

+91%

+73%

USA

92,690

40,435

+129%

+121%

Rest of world

65,215

37,484

+74%

+64%


579,800

294,635

+97%

+92%

 

KPIs

boohoo

 


2018

2017

Change

 

Active customers(1)

6.4 million

5.2 million

+22%

Number of orders

13.6 million

11.1 million

+22%

Order frequency(2)

2.13

2.13

-

Conversion rate to sale (3)

4.3%

4.0%(5)

+30bps

Average order value(4)

£39.25

£37.76

+4%

Number of items per basket

3.06

2.89

+6%

 

 

 



 

PrettyLittleThing

 

 

 


 

2018

2 months

2017

12 months 2017

12 months' change

 

Active customers(1)

3.0 million

1.3 million

1.3 million

+128%

Number of orders

 7.5 million

0.5 million

2.6 million

+189%

Order frequency(2)

2.55

2.00

2.00

+28%

Conversion rate to sale (3)

3.7%

3.7%

3.7%

-

Average order value(4)

£36.05

£33.18

£34.36

+5%

Number of items per basket

2.43

2.03

2.10

+16%

 

 

Nasty Gal

 


2018

Active customers(1)

0.4 million

Number of orders

0.6 million

Order frequency(2)

1.37

Conversion rate to sale (3)

1.7%

Average order value(4)

£52.82

Number of items per basket

2.89

 

(1) Defined as having shopped in the last 12 months

(2) Defined as number of orders in last 12 months divided by number of active customers

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

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

(5) 2017 restated on consistent basis as in 2018, based on website sessions only due to changing the app platform during 2018



 

Consolidated income statement

 


2018

2017

Change


£000

£000


Revenue

579,800

294,635

+97%

Cost of sales

(273,445)

(133,806)

+104%

Gross profit

306,355

160,829

+90%

Gross margin

52.8%

54.6%

-180bps





Operating costs

(249,582)

(128,723)


Other income

159

3,457


Adjusted EBITDA

56,932

35,563

+60%

Adjusted EBITDA margin %

9.8%

12.1%

-230bps





Depreciation

(3,997)

(2,488)


Amortisation of other intangible assets

(2,532)

(1,843)


Adjusted EBIT

50,403

31,232

+61%





Adjusting items:




Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets

(4,449)

(434)


Equity-settled share-based payment charges

(3,269)

(1,895)


Gain on option to acquire PrettyLittleThing.com Limited

-

1,405


Operating profit

42,685

30,308

+41%





Finance income

774

637


Finance expense

(146)

-


Profit before tax

43,313

30,945

+40%

Tax

(7,313)

(6,284)


Profit after tax for the year

36,000

24,661

+46%





Diluted earnings per share

2.71p

2.16p

+25%





Adjusted profit after tax for the year

42,310

25,119

+68%

Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets

(4,449)

(434)


Share-based payment charges

(3,269)

(1,895)


Gain on option to acquire PrettyLittleThing.com Limited

-

1,405


Adjustment for tax

1,408

466


Profit after tax for the year

36,000

24,661






Adjusted profit for the period attributable to shareholders of the company

37,610

24,916

+51%

Adjusted diluted earnings per share

3.23p

2.20p

+47%

Gross margin reduced from 54.6% to 52.8%, primarily due to an increase in promotional activity, which has in turn increased sales growth, and to a lesser extent due to an increase in the proportion of wholesale revenue.

Operating costs comprise distribution costs and administrative expenses excluding depreciation and amortisation and have slightly decreased by 70bps on revenue. Distribution costs have increased with revenue growth and remained broadly in line with the prior year as a percentage of revenue. Administrative expenses, which include marketing expenses, have risen due to the combination of revenue growth and the building of our infrastructure to support the future business expansion and also remained in line with the prior year percentage of revenue.

Adjusted EBITDA, which is not a statutory measure, represents earnings before interest, tax, depreciation, amortisation, non-cash share-based payments charges and exceptional items. It provides a useful measure of the underlying profitability of the business. Adjusted EBITDA increased by 60% from £35.6 million to £56.9 million and, as a percentage of revenue, decreased from 12.1% to 9.8%, due to a combination of investment in the customer proposition in boohoo driving revenue growth and to the immaturity of the newly acquired and rapidly growing businesses, PrettyLittleThing and Nasty Gal.

Adjusted profit after tax, as with Adjusted EBITDA, provides another more consistent measure of the underlying profitability of the business by removing non-cash amortisation of intangible assets relating to the acquisition of PrettyLittleThing and Nasty Gal (being their trademarks and customer lists), share-based payment charges and exceptional items.

 

Taxation

 

The effective rate of tax for the year was 16.9% (2017: 20.0%), which is less than the blended UK statutory rate of tax for the year of 19.1% (2017: 20.0%), due to prior year tax adjustments relating to UK tax incentives on qualifying expenditure.

 

Consolidated statement of financial position



2018

2017



£000

£000

Intangible assets


30,877

35,446

Property, plant and equipment


71,994

32,019

Financial assets


2,445

231

Deferred tax asset


6,479

4,494

Non-current assets


111,795

72,190





Working capital


(30,923)

(11,939)

Net financial assets


5,466

(11,817)

Cash and cash equivalents


142,575

70,330

Interest bearing loans and borrowings


(9,528)

(11,910)

Deferred tax liability


(2,101)

(2,597)

Current tax liability


(4,505)

(3,761)

Net assets


212,779

100,496

 

Working capital has reduced primarily due to an increase in payables and accruals relating to our increased trading activity and the acquisition of the new brands.



 

Intangible and fixed asset additions and acquisitions

 



2018

2017



£000

£000

Acquired intangible and fixed assets




 PrettyLittleThing intangible assets


-

14,952

 PrettyLittleThing tangible fixed assets


-

994



-

15,946

Purchased intangible and fixed assets




Intangible assets




 Nasty Gal intangible assets


-

16,096

 Patents and licences


9

1

 Software


2,403

2,213



2,412

18,310

Tangible fixed assets




 Distribution centre


33,753

8,958

 Offices, office equipment, fixtures and fit-outs


9,991

3,261

 Motor vehicles


228

145



43,972

12,364





Total intangible and fixed asset additions


46,384

46,620

 



 

Liquidity and financial resources

Operating cash flow was £76.2 million compared to £36.1 million in the previous year and free cash flow was £29.9 million compared to £5.4 million in the previous financial year. Capital expenditure was £46.4 million, which includes a £33.8 million investment in our distribution centre to support projected growth in trade. A share placing during the year raised £50 million. The closing cash balance for the group was £142.6 million and the net cash balance £133.0 million.

 

Consolidated cash flow statement

 


2018

2017


£000

£000




Profit for the year

36,000

24,661




Depreciation charges and amortisation

10,978

4,765

Share-based payments charge

3,269

1,895

Tax expense

7,313

6,284

Finance income

(774)

(637)

Finance expense

146

-

Increase in inventories

(14,078)

(11,925)

Increase in trade and other receivables

(5,393)

(4,107)

Increase in trade and other payables

38,780

15,166

Operating cash flow

76,241

36,102

Capital expenditure and intangible asset purchases

(46,384)

(30,675)

Free cash flow

29,857

5,427




Acquisition of 66% interest in PrettyLittleThing.com Limited (excess of cash acquired over consideration)

-

655

Gain on option to acquire PrettyLittleThing.com Limited

-

(1,405)

Proceeds from the issue of ordinary shares

51,531

54

Finance income received

612

614

Finance expense paid

(146)

-

Tax paid

(7,227)

(5,206)

Proceeds from new loan

-

11,910

Repayment of borrowings

(2,382)

-

Net cash flow

72,245

12,049




Cash and cash equivalents at beginning of year

70,330

58,281

Cash and cash equivalents at end of year

142,575

70,330



 

Trends and factors likely to affect future performance

The market for online fashion is forecast to continue to grow and, along with the increasing use of the internet globally, provides a favourable backdrop for the group with much opportunity for further growth. Customers throughout the world are seeking a wide choice of quality products at value prices lower than those available on the high street with the convenience of home delivery. The group's target market has a high propensity to spend on fashion and the market is resilient to external macroeconomic factors.

 



 

Outlook

We are very encouraged by the continued growth of our brands across all geographic regions. As online fashion retail grows globally, the group is well-placed to benefit from changing consumer preferences. Our strategy will remain focussed on providing the best fashion at great prices coupled with excellent customer service. To this end we have a plan of continuous investment in systems and technology to ensure we offer an optimal online shopping experience. International expansion will continue as we add more country-specific websites, refine our customer proposition and raise brand awareness through marketing and social media.

Our extended Burnley distribution centre, which will have a significant element of automation to drive efficiency savings, is scheduled for operational use in early 2019 and will provide sufficient capacity for an operation of over £1 billion net sales. PrettyLittleThing is also to move into its own warehouse in the first half of the FY19 financial year. This brings incremental sales capacity in addition to that in our Burnley operations, will help underpin our infrastructure needs and add further operational flexibility for the group. It represents a significant milestone as we develop a distribution network capable of generating £3 billion of net sales globally, in line with our vision to lead the fashion eCommerce market.

Trading in the first few weeks of the 2019 financial year has made a strong start. Group revenue growth for the next financial year (FY19) is expected to be 35% to 40% with adjusted EBITDA margin between 9% to 10% and capital expenditure of £50 to £60 million.

Consolidated statement of comprehensive income

for the year ended 28 February 2018


Note


2018

2017




£000

£000

Revenue

2


579,800

294,635

Cost of sales



(273,445)

(133,806)

Gross profit



306,355

160,829






Distribution costs



(126,757)

(66,849)

Administrative expenses



(132,623)

(68,100)

Amortisation of acquired intangibles



(4,449)

(434)

Other income

3


159

4,862

Operating profit

5


42,685

30,308






Finance income

4


774

637

Finance expense



(146)

-

Profit before tax



43,313

30,945






Taxation

9


(7,313)

(6,284)






Profit for the year



36,000

24,661






Profit for the year attributable to:





Owners of the parent company



31,652

24,458

Non-controlling interests



4,348

203




36,000

24,661






Total other comprehensive income/(expense) for the year, net of income tax

Loss reclassified to profit and loss during the year



6,516

9,604

Fair value gain/(loss) on cash flow hedges during the year



12,981

(16,351)

Total comprehensive income for the year



55,497

17,914






Total comprehensive income attributable to:





Equity attributable to owners of the parent company



51,149

17,711

Non-controlling interests



4,348

203

Total equity



55,497

17,914






Earnings per share

6




Basic



2.78p

2.19p

Diluted



2.71p

2.16p

 

 

 

 



 


Consolidated statement of financial position

at 28 February 2018


Note


2018

2017

                                                                     



£000

£000

Assets





Non-current assets





Intangible assets

10


30,877

35,446

Property, plant and equipment

11


71,994

32,019

Financial assets

19


2,445

231

Deferred tax

13


6,479

4,494




111,795

72,190

Current assets





Inventories

14


48,248

34,170

Trade and other receivables

15


17,499

11,944

Financial assets

19


6,770

489

Cash and cash equivalents



142,575

70,330

Total current assets



215,092

116,933






Total assets



326,887

189,123






Liabilities





Current liabilities





Trade and other payables

16


(96,670)

(58,053)

Interest bearing loans and borrowings

17


(2,382)

(2,382)

Financial liabilities

19


(837)

(10,229)

Current tax liability



(4,505)

(3,761)

Total current liabilities



(104,394)

(74,425)






Non-current liabilities





Interest bearing loans and borrowings

17


(7,146)

(9,528)

Financial liabilities

19


(467)

(2,077)

Deferred tax

13


(2,101)

(2,597)






Total liabilities



(114,108)

(88,627)








212,779

100,496






Equity





Share capital

18


11,496

11,233

Share premium



602,578

551,720

Capital redemption reserve



100

100

Hedging reserve



7,911

(11,586)

EBT reserve



(351)

(761)

Translation reserve



168

5

Reconstruction reserve



(515,282)

(515,282)

Non-controlling interest



8,761

3,978

Retained earnings



97,398

61,089

Total equity      



212,779

100,496

 



 

Consolidated statement of changes in equity


Share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Translation reserve

Reconstruction reserve

Non-controlling interest

Retained earnings

Total equity


£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance at 29 February 2016

11,233

551,666

100

(4,839)

(761)

1

(515,282)

-

31,309

73,427












Acquisition of 66% interest in PrettyLittleThing.com Limited

-

-

-

-

-

-

-

3,775

-

3,775

Issue of shares

-

54

-

-

-

-

-

-

-

54

Share-based payments credit

-

-

-

-

-

-

-

-

1,895

1,895

Excess deferred tax on share-based payments

-

-

-

-

-

-

-

-

3,427

3,427

Profit for the year

-

-

-

-

-

-

-

203

24,458

24,661

Translation of foreign operations

-

-

-

-

-

4

-

-

-

4

Loss reclassified to profit and loss

-

-

-

9,604

-

-

-

-

-

9,604

Fair value loss on cash flow hedges during the year

-

-

-

(16,351)

-

-

-

-

-

(16,351)

Balance at 28 February 2017

11,233

551,720

100

(11,586)

(761)

5

(515,282)

3,978

61,089

100,496












Issue of shares

264

50,857

-

-

410

-

-

-

-

51,531

Share-based payments credit

-

-

-

-

-

-

-

435

2,834

3,269

Excess deferred tax on share-based payments

-

-

-

-

-

-

-

-

1,823

1,823

Profit for the year

-

-

-

-

-

-

-

4,348

31,652

36,000

Translation of foreign operations

-

-

-

-

-

163

-

-

-

163

Loss reclassified to profit and loss

-

-

-

6,516

-

-

-

-

-

6,516

Fair value gain on cash flow hedges during the year

-

-

-

12,981

-

-

-

-

-

12,981

Balance at 28 February 2018

11,496

602,578

100

7,911

(351)

168

(515,282)

8,761

97,398

212,779

 

 

 


Consolidated cash flow statement

for the year ended 28 February 2018

 


Note


2018

2017




£000

£000

Cash flows from operating activities





Profit for the year



36,000

24,661

Adjustments for:





Share-based payments charge



3,269

1,895

Depreciation charges and amortisation



10,978

4,765

Gain on option to acquire PrettyLittleThing.com Limited



-

(1,405)

Finance income



(774)

(637)

Finance expense



146

-

Tax expense



7,313

6,284



56,932

35,563






Increase in inventories

14


(14,078)

(11,925)

Increase in trade and other receivables

15


(5,393)

(4,107)

Increase in trade and other payables

16


38,780

15,166

Cash generated from operations



76,241

34,697






Tax paid



(7,227)

(5,206)

Net cash generated from operating activities



69,014

29,491






Cash flows from investing activities





Acquisition of intangible assets

10


(2,412)

(18,311)

Acquisition of property, plant and equipment

11


(43,972)

(12,364)

Acquisition of 66% interest in PrettyLittleThing.com Limited (excess of cash acquired over consideration)


-

655

Finance income received



612

614

Net cash used in investing activities



(45,772)

(29,406)






Cash flows from financing activities





Proceeds from the issue of ordinary shares



52,281

54

Share issue costs written off to share premium



(750)

-

Finance expense paid



(146)

-

Proceeds from new loan



-

11,910

Repayment of borrowings



(2,382)

-

Net cash generated from financing activities



49,003

11,964






Increase in cash and cash equivalents



72,245

12,049






Cash and cash equivalents at beginning of year



70,330

58,281

Cash and cash equivalents at end of year



142,575

70,330

 


Notes to the financial statements

(forming part of the financial statements)

1              Accounting policies

General information

boohoo.com plc is a public limited company incorporated and domiciled in Jersey and listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Its registered office address is: 12 Castle Street, St Helier, Jersey, JE2 3RT. The company was incorporated on 19 November 2013.

Basis of preparation

This condensed consolidated financial information for the year ended 28 February 2018 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the European Union ("Adopted IFRSs"), IFRS IC Interpretations and the Companies (Jersey) Law 1991.

 

The financial information contained in this preliminary announcement for the years ended 28 February 2018 and 28 February 2017 does not comprise the group's statutory financial statements within the meaning of Companies (Jersey) Law 1991. Statutory accounts for the year ended 28 February 2018 will be filed with the Jersey Companies Registry in due course. The auditors' report on the statutory accounts for each of the years ended 28 February 2018 and 28 February 2017 is unqualified, does not draw attention to any matters by way of emphasis and does not contain any statement under any matters that are required to be reported by exception under Companies (Jersey) Law 1991.

 

Going concern

The directors have reviewed the group's forecast and projections, including assumptions concerning capital expenditure and expenditure commitments and their impact on cash flows, and have a reasonable expectation that the group has adequate financial resources to continue its operations for the foreseeable future. For this reason they have continued to adopt the going concern basis in preparing the financial statements.

In preparing the preliminary announcement, the directors have also made reasonable and prudent judgements and estimates and prepared the preliminary announcement on the going concern basis. The preliminary announcement and management report contained herein give a true and fair view of the assets, liabilities, financial position and profit and loss of the group.

Changes to accounting standards

There have been no changes to accounting standards during the year which have had or are expected to have any material impact on the group.

2              Segmental analysis



Year ended 28 February 2018



boohoo

PLT

Nasty Gal

Total



£000

£000

£000

£000

Revenue


374,115

181,269

24,416

579,800







Cost of sales


(182,394)

(81,175)

(9,876)

(273,445)

Gross profit


191,721

100,094

14,540

306,355







Distribution costs


(80,417)

(40,661)

(5,679)

(126,757)

Segment result


111,304

59,433

8,861

179,598







Administrative expenses


-

-

-

(137,072)

Other income


-

-

-

159

Operating profit


-

-

-

42,685







Finance income


-

-

-

774

Finance expense


-

-

-

(146)

Profit before tax


-

-

-

43,313



 

Year ended 28 February 2017

 



boohoo

PLT


Total

 



£000

£000


£000

 

Revenue


283,378

11,257


294,635

 







 

Cost of sales


(129,026)

(4,780)


(133,806)

 

Gross profit


154,352

6,477


160,829

 







 

Distribution costs


(64,375)

(2,474)


(66,849)

 

Segment result


89,977

4,003


93,980

 







 

Administrative expenses


-

-


(68,534)

 

Other income


-

-


4,862

 

Operating profit


-

-


30,308

 







 

Finance income


-

-


637

 

Finance expense


-

-


-

 

Profit before tax


-

-


30,945

 

 

Revenue by geographic region



2018

2017



£000

£000

UK


355,614

181,981

Rest of Europe


66,281

34,735

USA


92,690

40,435

Rest of world


65,215

37,484



579,800

294,635

 

3             Other income



2018

2017



£000

£000

Income from warehouse management services


-

3,457

Rental income


159

-

Gain on option to acquire PrettyLittleThing.com Limited


-

1,405



159

4,862

 

The income from warehouse management services provided to PLT ceased after PLT became part of the group in January 2017.

 

4             Finance income and expense



2018

2017



£000

£000

Finance income: Bank interest received


774

637

Finance expense: Loan interest paid


(146)

-

 

 

 

 



 

 

5              Profit before tax

Profit before tax is stated after charging/(crediting):

2018

2017


£000

£000

Operating lease rentals for buildings

1,509

1,060

Equity-settled share-based payment charges

3,269

1,895

Gain on option to acquire PrettyLittleThing.com Limited

-

(1,405)

Depreciation of property, plant and equipment

3,997

2,488

Amortisation of intangible assets

2,532

1,843

Amortisation of acquired intangible assets

4,449

434

 

6              Earnings per share

Basic earnings per share is calculated by dividing profit after tax attributable to members of the holding company by the weighted average number of shares in issue during the year. Own shares held by the Employee Benefit Trust are eliminated from the weighted average number of shares. Diluted earnings per share is calculated by dividing the profit after tax attributable to members of the holding company by the weighted average number of shares in issue during the year, adjusted for potentially dilutive share options.



2018

2017

Weighted average shares in issue for basic earnings per share


1,138,722,751

1,118,177,098

Dilutive share options


27,108,839

16,269,059

Weighted average shares in issue for diluted earnings per share


1,165,831,590

1,134,446,158





Earnings (£000)


31,652

24,458

Basic earnings per share


2.78p

2.19p

Diluted earnings per share


2.71p

2.16p





Earnings (£000)


31,652

24,458

Adjusting items:




Amortisation of intangible assets arising on acquisitions


4,449

434

Share-based payment charges


3,269

1,895

Gain on option to acquire PrettyLittleThing.com Limited


-

(1,405)

Adjustment for tax


(1,408)

(466)

Adjustment for non-controlling interest


(352)

-

Adjusted earnings


37,610

24,916

Basic adjusted earnings per share


3.30p

2.23p

Diluted adjusted earnings per share


3.23p

2.20p





Adjusted earnings and adjusted earnings per share gives a more consistent measure of the underlying performance of the business excluding non-cash accounting charges relating to the amortisation of intangible assets valued upon acquisitions, non-cash share-based payment charges and other exceptional items.

 



 

 

7              Staff numbers and costs

The average monthly number of persons employed by the group (including directors) during the year, analysed by category, was as follows:


Number of employees


2018

2017

Administration

955

689

Distribution

1,220

612


2,175

1,301

 

The aggregate payroll costs of these persons were as follows:


2018

2017


£000

£000

Wages and salaries

49,510

31,567

Social security costs

5,553

4,551

Post-employment benefits

647

410

Equity-settled share-based payment charges

3,269

1,895


58,979

38,423

 

 

 

8              Directors' and key management compensation


2018

2017


£000

£000

Short-term employee benefits

5,856

5,006

Post-employment benefits

131

86

Equity-settled share-based payment charges

454

17


6,441

5,109

Directors' and key management compensation comprises the directors and executive committee members.

 

9              Taxation


2018

2017


£000

£000

Analysis of charge in year






Current tax on income for the year

9,294

7,126

Adjustments in respect of prior year taxes

(1,323)

(6)

Deferred taxation

(658)

(836)

Tax on profit on ordinary activities

7,313

6,284


      

      



 

The total tax charge differs from the amount computed by applying the blended UK rate of 19.08% for the year (2017: 20.0%) to profit before tax as a result of the following:




Profit on ordinary activities before tax

43,313

30,945

Profit before tax multiplied by the standard blended rate of corporation tax of the UK of 19.08% (2017: 20.0%)

8,273

6,189

Effects of:



Expenses not deductible for tax purposes

375

246

Income not subject to tax

-

(320)

Adjustments in respect of prior year taxes

(1,323)

(6)

Overseas tax differentials

9

5

Depreciation in excess of capital allowances

(21)

170

Tax on profit on ordinary activities

7,313

6,284

 

A change to reduce the main rate of corporation tax to 17% from 1 April 2020 was announced in the Chancellor's budget on 16 March 2016. Changes to reduce the UK corporation tax rate to 19% from 1 April 2017 and to 17% from 1 April 2020 had already been substantively enacted on 15 September 2016. The prior year tax adjustment is in respect of tax incentives for research and development expenditure.

10           Intangible assets


Patents and licences

Trademarks

Customer lists

Computer software

Total


£000

£000

£000

£000

£000

Cost






Balance at 1 March 2016

309

-

-

7,075

7,384

On acquisition

-

10,000

4,800

152

14,952

Additions

1

15,070

1,026

2,213

18,310

Disposals

-

-

-

(232)

(232)

Balance at 28 February 2017

310

25,070

5,826

9,208

40,414







Additions

9

-

-

2,403

2,412

Disposals

-

-

-

(567)

(567)

Balance at 28 February 2018

319

25,070

5,826

11,044

42,259







Accumulated amortisation






Balance at 1 March 2016

149

-

-

2,693

2,842

On acquisition

-

-

-

81

81

Amortisation for year

31

167

267

1,812

2,277

Disposals

-

-

-

(232)

(232)

Balance at 28 February 2017

180

167

267

4,354

4,968







Amortisation for year

31

2,507

1,942

2,501

6,981

Disposals

-

-

-

(567)

(567)

Balance at 28 February 2018

211

2,674

2,209

6,288

11,382







Net book value






At 29 February 2016

160

-

-

4,382

4,542

At 28 February 2017

130

24,903

5,559

4,854

35,446

At 28 February 2018

108

22,396

3,617

4,756

30,877

 

The cost and accumulated amortisation of trademarks and customer lists on acquisition represent those of PrettyLittleThing and the cost of trademarks and customer lists additions represent those of Nasty Gal.

11           Property, plant and equipment


Short leasehold

Fixtures and fittings

Computer equipment

Motor vehicles

Land & buildings

Total


£000

£000

£000

£000

£000

£000

Cost







Balance at 1 March 2016

766

9,498

1,565

113

13,169

25,111

On acquisition

409

157

401

27

-

994

Additions

172

6,631

689

145

4,727

12,364

Disposals

(226)

(681)

(171)

-

-

(1,078)

Balance at 28 February 2017

1,121

15,605

2,484

285

17,896

37,391








Additions

1,156

19,911

1,593

228

21,084

43,972

Disposals

(54)

(72)

(540)

(74)

-

(740)

Balance at 28 February 2018

2,223

35,444

3,537

439

38,980

80,623








Accumulated depreciation







Balance at 1 March 2016

479

1,815

994

51

346

3,685

On acquisition

66

30

176

5

-

277

Depreciation charge for the year

118

1,538

512

66

254

2,488

Disposals

(226)

(681)

(171)

-

-

(1,078)

Balance at 28 February 2017

437

2,702

1,511

122

600

5,372








Depreciation charge for the year

328

2,463

763

85

358

3,997

Disposals

(54)

(72)

(540)

(74)

-

(740)

Balance at 28 February 2018

711

5,093

1,734

133

958

8,629








Net book value







At 29 February 2016

287

7,683

571

62

12,823

21,426

At 28 February 2017

684

12,903

973

163

17,296

32,019

At 28 February 2018

1,512

30,351

1,803

306

38,022

71,994

 

The cost and accumulated depreciation on acquisition represent those of PrettyLittleThing

12           Investments

The subsidiaries held and consolidated in these financial statements are set out below:

Name of company

Principal activity

Country of incorporation

Address

Percentage ownership

ABK Limited

Holding company

Jersey

12 Castle St, St Helier, Jersey

100%

boohoo.com UK Limited

Trading company

UK

49-51 Dale St, Manchester

100%

Boo Who Limited

Dormant company

UK

49-51 Dale St, Manchester

100%

boohoo.com USA Limited

Dormant company

UK

49-51 Dale St, Manchester

100%

boohoo.com USA Inc

Marketing office

USA

3 West 13th Street, New York

100%

boohoo.com Australia Pty Ltd

Marketing office

Australia

468 St Kilda Road, Melbourne

100%

PrettyLittleThing.com Limited

Internet fashion retail

UK

Wellington Mill, Pollard Street East, Manchester

66%

21Three Clothing Company Limited

Dormant company

UK

Wellington Mill, Pollard Street East, Manchester

66%

PrettyLittleThing.com USA Inc

Marketing office

USA

1209 Orange Street, Delaware

66%

Nasty Gal.com Limited

Trading company

UK

49-51 Dale St, Manchester

100%

Nasty Gal.com USA Inc

Marketing office

USA

6600 W Sunset Boulevard, Los Angeles

100%

Shanghai Wasabi Frog Boohoo Ltd

Dormant company

China

49-51 Dale St, Manchester

100%

 



 

 

13           Deferred tax

 

Assets

 

Depreciation in excess of capital allowances

Share-based payments

Total


£000

£000

£000

Asset at 1 March 2016

62

169

231

Recognised in statement of comprehensive income

170

666

836

Credit in equity

-

3,427

3,427

Asset at 28 February 2017

232

4,262

4,494

Recognised in statement of comprehensive income

(72)

234

162

Credit in equity

-

1,823

1,823

Asset at 28 February 2018

160

6,319

6,479

 

Liabilities

 

 


Business combinations

Total



£000

£000

Recognised in statement of comprehensive income


(2,597)

(2,597)

Liability at 28 February 2017


(2,597)

(2,597)

Recognised in statement of comprehensive income


496

496

Liability at 28 February 2018


(2,101)

(2,101)

 

Recognition of the deferred tax assets is based upon the expected generation of future taxable profits. The deferred tax asset is expected to be recovered in more than one year's time and the deferred tax liability will reverse in more than one year's time as the intangible assets are amortised.

 

14           Inventories


2018

2017


£000

£000

Finished goods

48,248

34,170

 

The value of inventories included within cost of sales for the year was £270,323,000 (2017: £133,515,000). An impairment provision of £3,413,000 (2017: £291,000) was charged to the statement of comprehensive income. There were no write-backs of prior period provisions during the year.

 

 

 

15           Trade and other receivables


2018

2017


£000

£000

Trade receivables

13,381

9,446

Prepayments

3,658

2,489

Accrued income

460

9


17,499

11,944

Trade receivables represent amounts due from wholesale customers and advance payments to suppliers. Receivables past due are £339,000 (2017: £698,000). The provision for impairment of trade receivables is £674,000 (2017: £573,000).

The fair value of trade and other receivables is not materially different from the carrying value.

 

 

16           Trade and other payables

 


2018

2017


£000

£000

Trade payables

34,203

23,124

Amounts owed to related party undertakings

31

2

Other creditors

1,084

3,090

Accruals

50,399

24,098

Deferred income

5,556

3,367

Taxes and social security payable

5,397

4,372


96,670

58,053

 

The fair value of trade payables is not materially different from the carrying value.

 

17           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.


2018

2017


£000

£000

Non-current liabilities



Secured bank loans

7,146

9,528




Current liabilities



Current portion of secured bank loans

2,382

2,382

 

 

Terms and debt repayment schedule





Nominal








interest

Year of

2018

2017




Currency

rate

maturity

£000

£000

Secured bank loan



GB£

LIBOR + 0.95%

2022

9,528

11,910

 

The loan is repayable in instalments over the five years to 2022. The loan is secured by a debenture comprising fixed and floating charges over all the assets and undertakings of boohoo.com UK Limited of £99.4 million (2017: £48.4 million), including all present and future freehold property, book and other debts, chattels and goodwill, both present and future.

 



 

 

18           Share capital and reserves


2018

2017


£000

£000

1,149,574,495 authorised and fully paid ordinary shares of 1p each

(2017: 1,123,304,869)

11,496

11,233

 

During the year, a total of 3,504,814 shares were issued under the share incentive plans (2017: nil). On 7 June 2017, 22,727,273 shares were issued in a private placing of shares, raising £50 million. On 23 February 2018, 35,224 new ordinary shares were issued to non-executive directors as part of their annual remuneration (2017: 37,539).

The directors do not recommend the payment of a dividend so that cash is retained in the group for capital expenditure projects that are required for the rapid growth and efficiency improvements of the business and for suitable business acquisitions (2017: £nil).

19           Financial instruments

 

Fair values


2018

2017


£000

£000

Financial assets



Cash and cash equivalents

142,575

70,330

Cash flow hedges

9,215

720

Trade and other receivables

13,841

9,455


165,631

80,505

 


2018

2017


£000

£000

Financial liabilities



Cash flow hedges

1,304

12,306

Trade and other payables

91,114

54,686

Interest bearing loans and borrowings

9,528

11,910


101,946

78,902

 

20           Capital commitments

Capital expenditure contracted for at the end of the reporting year but not yet incurred is as follows:


2018

2017


£000

£000

Property, plant and equipment

27,999

2,100

 

21          Operating Leases             

The group has lease agreements in respect of property, plant and equipment, for which the payments extend over a number of years. The totals of future minimum lease payments under non-cancellable operating leases due in each period are:        


2018

2017


£000

£000

Within one year

1,028

1,229

Within two to five years

3,066

2,785

In more than five years

792

916


4,886

4,930

 

 

 

22           Contingent liabilities

From time to time, the group can be subject to various legal proceedings and claims that arise in the ordinary course of business which may include cases relating to the group's brand and trading name. All such cases brought against the group are robustly defended and a liability is recorded only when it is probable that the case will result in a future economic outflow and that the outflow can be reliably measured.

As at 28 February 2018, there are no pending claims or proceedings against the group which are expected to have a material adverse effect on its liquidity or operations.



 


Appendix - prior period revenues by region

 

Revenue by period for the year to 28 February 2018 (FY18)

 

£'000

4m to 31 December

12m to 28 February


FY18

FY17

yoy %

yoy % CER

FY18

FY17

yoy %

yoy %

FY18

FY17

yoy %

 

yoy %

CER

Total

228,215

114,294

100%

93%

88,710

53,025

67%





Revenue by region




 UK

135,642

65,465

107%

107%

56,592

34,820

63%

181,981

 ROE

28,232

13,963

102%

76%

10,258

6,059

69%

34,735

 USA

39,618

19,299

105%

102%

13,475

5,910

128%

40,435

 ROW

24,723

15,567

59%

46%

8,385

6,236

34%

37,484

 

£'000

3m to 31 May

6m to 31 August


FY18

FY17

yoy %

yoy % CER

FY18

FY17

yoy %

yoy %

FY18

FY17

yoy %

 

yoy %

CER

Total

120,077

58,222

106%

98%

142,798

69,094

107%





Revenue by region




 UK

74,532

37,396

99%

99%

88,849

44,300

101%

81,696

 ROE

12,220

6,938

76%

61%

15,571

7,775

100%

14,713

 USA

17,906

6,385

180%

155%

21,690

8,841

145%

15,226

 ROW

15,419

7,503

105%

80%

16,688

8,178

104%

15,681

 

 

Revenue by period for the year to 28 February 2017 (FY17)

£'000

4m to 31 December

12m to 28 February


FY17

FY16

yoy %

yoy % CER

FY17

FY16

yoy %

yoy %

FY17

FY16

yoy %

 

yoy %

CER

Total

114,294

73,692

55%

52%

53,025

30,918

72%

195,394





Revenue by region




 UK

65,465

49,701

32%

32%

34,820

21,267

64%

130,096

 ROE

13,963

8,588

63%

54%

6,059

3,639

67%

22,630

 USA

19,299

5,962

224%

183%

5,910

2,660

122%

16,523

 ROW

15,567

9,441

65%

56%

6,236

3,352

86%

26,145

 

£'000

3m to 31 May

6m to 31 August


FY17

FY16

yoy %

yoy % CER

FY17

FY16

yoy %

yoy %

FY17

FY16

yoy %

 

yoy %

CER

Total

58,222

41,322

41%

42%

69,094

49,462

40%





Revenue by region




 UK

37,396

26,273

42%

42%

44,300

32,855

35%

59,128

 ROE

6,938

4,943

40%

43%

7,775

5,460

42%

10,403

 USA

6,385

3,815

67%

60%

8,841

4,086

116%

7,901

 ROW

7,503

6,291

19%

27%

8,178

7,061

16%

13,352

 

 


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