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boohoo.com plc (BOO)

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Wednesday 27 September, 2017

boohoo.com plc

Interim Results

RNS Number : 9002R
boohoo.com plc
27 September 2017
 

For Immediate Release                                                                 27 September 2017

 

This announcement contains inside information

 

boohoo.com plc - interim results for the six months ended 31 August 2017

 

"Leading the fashion eCommerce market"

 

£ million

6 months ended 31 August 2017

6 months ended 31 August 2016

Change

 

Revenue

262.9

127.3

+106%

Gross profit

140.2

70.5

+99%

  Gross margin

53.3%

55.3%

-200bps

Operating profit

20.0

14.1

+42%

Adjusted EBITDA(1)

27.8

16.5

+68%

  Adjusted EBITDA margin

10.6%

13.0%

-240bps

Profit before tax

20.3

14.4

+41%





Net cash(2) at period end

119.2

67.1

+£52m

Basic earnings per share

1.25p

1.01p

+24%

 

(1) Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation and share-based payment charges.

(2) Net cash is cash less borrowings.        (3): CER designates Constant Exchange Rate translation of foreign currency revenue.

 

Highlights for the six months to 31 August 2017

Group

·     Revenue growth 106% (101% CER(3))

·     Gross margin 53.3% (2017: 55.3%), down 200bps in line with planned investments in the customer proposition

·     Adjusted EBITDA up 68% at £27.8 million, 10.6% of revenue (2017: £16.5 million, 13.0%)

·     Strong balance sheet with net cash of £119.2 million (2017: £67.1 million) following £50 million share placing

·     Significant investment in IT and warehousing

·     Guidance raised for the full year

boohoo

·     Revenue £181.8 million, up 43% (40% CER)

·     Gross margin 52.3%, down 300bps, driven by planned investments in the customer proposition

·     Retail gross margin 54.4% (2017: 57.0%)

 

PrettyLittleThing

·     Revenue £72.7 million, up 289% on prior year comparative

·     Gross margin 54.8%

 

Nasty Gal

·     Revenue £8.4 million, increasing month-on-month from start-up in March 2017

 

Guidance

The group's revenue growth is now expected to be around 80%, up from our previous guidance of around 60%. Revenue growth from the boohoo brand is expected to be at the upper end of previous guidance at around 30%. Revenue growth from the PrettyLittleThing brand is now expected to be approximately 150% above the 12 month revenue to 28 February 2017 of £55 million (double the previous guidance of 75%). The balance of the group's growth will come from the Nasty Gal brand. As a result of significantly better-than-expected revenue growth from PrettyLittleThing and our investment in price, promotion and marketing, we now expect group adjusted EBITDA margins to be between 9% and 10%.

Mahmud Kamani and Carol Kane, joint CEOs, commented:

"We are pleased to report excellent progress for the group in the first half of the year across all our brands. boohoo's revenue has continued to grow across all geographies, with international growth being strongest as we continue to increase our market share overseas, and the newly acquired PrettyLittleThing brand has exceeded our growth expectations. PrettyLittleThing is fast gaining recognition amongst our target consumers as a highly desirable fashion brand in the UK, and its international growth is very encouraging, confirming its considerable potential. boohooMan has also performed very well, with high growth rates in the UK and overseas. Nasty Gal was rebuilt by us from virtually a zero base after acquisition in March this year and it is growing well month-on-month.

The integration of the two new brands has been successful, adding diversity to our business whilst enabling us to draw upon our strengths in marketing, sourcing, operations and customer service to deliver profitable results and greatly increasing the group's potential.

We have continued to make significant investment in IT infrastructure and warehouse capacity to ensure stable and sustained execution of the group's growth strategy and plans are progressing well for the next phase of longer term requirements for warehouse capacity.

We will continue to invest in the customer proposition, further develop our brands and maximise the considerable opportunities that a global marketplace affords us. The strong performance in the first half-year and our expectations for the second half have given us confidence to raise guidance for the full year."

 

Investor and Analyst Meeting

 

A meeting for analysts will be held on 27 September 2017 at the office of Buchanan, 107 Cheapside, London, EC2V 6DN commencing at 9.30am. boohoo.com plc's interim results 2018 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/2017/boohoo270917/registration.htm

 

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

 

Enquiries

boohoo.com plc

Neil Catto, Chief Financial Officer

Clara Melia, Investor Relations

 

Tel: +44 (0)161 233 2050

Tel: +44 (0)7748 171236

 

Zeus Capital - Nominated adviser and joint broker

Nick Cowles/Andrew Jones (Corporate Finance)

John Goold/Benjamin Robertson (Corporate Broking)

 

Tel: +44 (0)161 831 1512

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

Richard Oldworth/Madeleine Seacombe/

Gemma Mostyn-Owen

Tel: +44 (0)20 7466 5000

[email protected]

 

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 and children's wear, through boohooMAN and boohooKIDS. 

 

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 over 8 million customers in almost every country in the world. 

 

 

Cautionary Statement

 

Certain statements included or incorporated by reference within this announcement may constitute "forward-looking statements" in respect of the 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. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast. This announcement 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 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.




Review of the business

Group overview

Group revenue for the half year increased by 106% (101% CER) on the previous year to £262.9 million (2017: £127.3 million). Revenue growth across all territories and brands was strong.

Adjusted EBITDA was £27.8 million (2017: £16.5 million), an increase of 68% on the prior half year, with planned investments in the customer proposition and marketing in rapidly growing sectors of the group leading to an adjusted EBITDA margin of 10.6% (2017: 13.0%). Profit before tax was £20.3 million (2017: £14.4 million), an increase of 41%.

Earnings per share rose to 1.25p, an increase of 24% (2017: 1.01p).

Cash less borrowings closed at £119.2 million, after the £50 million share placing in June and after capital expenditure of £20.2 million.

Warehouse

Construction of the new warehouse adjacent to the existing extended warehouse is well under way, with completion expected in January 2018. The extension adds a footprint of 166,000 square feet, nearly doubling existing storage capacity. The plans incorporate a significant amount of automation, which will improve efficiency as the business grows and have a short payback period on the capital invested.

We have completed the refurbishment of an adjacent warehouse site for in-bound processing and also invested in improved employee facilities at the main warehouse, which will be brought into use in early 2018.

Project planning for future storage requirements in three years' time and beyond are also well under way with a project team working on planning of the next phase of warehouse development.

 

boohoo and boohooMAN

Performance

Revenue for the half year increased to £181.8 million, up 43% (40% CER) on the previous half year.

Additional breadth in the product range has contributed to revenue growth, with several new product categories introduced in the year. boohooMAN is showing very strong growth across all geographies.

Product

The increased product range is continuing to drive revenue growth and new introductions have performed well. Plus size, curve, petite and menswear have been the categories with the highest sales and strongest growth, whilst the more recently-introduced boohooKids, maternity, lingerie and tall ranges are also showing high rates of growth.

Our offering of over 36,000 styles and great prices is appealing to our young customer base and we are passionate about giving our customers the greatest choice and best value for their entire fashion wardrobe. Our latest introduction in July was boohoo Premium, which is a fabulous range of ultra-stylish womens' clothing for special occasions. The range consists of great fitting embellished clothing in limited editions and higher price points compared to our mainstream ranges.

We are also pleased with the growth of menswear sales as the range becomes ever stronger, appealing to an increasingly large audience.

Marketing

Our marketing activity has continued to build on our successful formula of a mix of media, including social media influencers, bloggers, TV, outdoor, email, student campus tours and events. Love Island celebrities have been working with us on several shoots and Jess Woodley from Made in Chelsea is now one of our UK brand ambassadors. Our latest campaign #allgirls is all about boohoo reflecting our long-standing ethos of inclusiveness and individuality when it comes to affordable fashion for every girl's style and taste.

boohooMAN increased its TV advertising now that the brand is reaching a significant audience and promoting brand awareness becomes more effective using this medium. boohooMAN released a design collaboration with Tyga and a collection featuring Love Island winner, Kem Cetinay.

Customer interaction

Active customer numbers over the last 12 months increased by 29% to 5.8 million and the number of website sessions in the first half year grew by 20% to 158 million.  Order frequency remained unchanged with customers placing an order with us, on average, 2.11 times in 12 months, whilst the number of items per basket rose 11% to 3.17. Conversion rate to sale improved from 3.9% to 4.1% of sessions. On social media we have 4.4 million followers on Instagram, 3.1 million Facebook likes, 0.5 million followers on Twitter and 3.7 million views recorded on YouTube.

We have continued to refine the customer experience with improvements in the timeliness of refunds for international customers. US customers now receive refunds once the return has been handed to the delivery service by the customer. This process will also be extended to other territories in the second half of the year. In key international markets, we are rolling out free returns in more markets and reducing delivery times. In the UK, customers can now use a portal to log their returns and print their return label, which also speeds up returns processing.

Web-chat services have been extended from 5pm to 9pm in response to customer demand and the success of this service.

Technology

We have continued the phased migration of websites to the new platform which has performed very well in terms of stability and flexibility as well as reducing operating costs. Further migration of the remaining European language websites is taking place over the next few months until all sites are on the new platform by the year end.

We have a continual programme of app improvement and development including roll-out of the app to more international markets. Mobile device use has risen to 70% of sessions.

 

PrettyLittleThing

Performance

Revenue growth has continued very strongly throughout the first half year with growth over the previous year's equivalent of 289% and revenue reaching £72.7 million. Gross margin has remained strong at 54.8%, despite increasing wholesale revenue (at lower margin than retail), and with increasing leverage on overhead efficiency, profitability has greatly improved.

Sales across all geographic regions have increased dramatically. The international business is gaining considerable momentum, with international sales being nearly seven times higher than in the first half of the previous year.

Product

PrettyLittleThing makes the hottest fashions and celebrity looks attainable for our young consumers, with a choice of over 9,000 styles with new items arriving daily. We have widened the product range with higher price point premium categories, more beauty products and, from September 2017, a curve range.

Marketing

Marketing activity continues to be concentrated around social media, which is proving to be highly successful in driving new customer growth. In the USA we have worked with a number of high profile influencers. Above the line advertising continues to support brand awareness amongst the younger generation, with the result that the brand is one of the hottest in the UK on-line market at present.

Customer interaction

A French language website was added this year, taking the number of country-specific websites to eight. We have also improved the delivery times to the USA and Australia, as well as reducing the costs on a number of international routes. Significant enhancements planned for the second half of the year include returns portals for international customers, a new customer relationship management system and click and collect delivery services.

We have 1.0 million followers on Facebook (an increase of 51% in 6 months), 0.3 million followers on Twitter, 2.1 million Instagram followers (an increase of 35% in 6 months), 2.0 million YouTube views as well as a presence on several other social media channels.

Technology

We have android and iOS apps for the UK and, newly in the first half year, for the US market. IT investments planned in the second half include new software to personalise website presentation to customers, which should lead to higher conversion rates, and an improved app.

 

Nasty Gal

Performance

Revenue has increased rapidly month-on-month from the new start-up post acquisition on 1 March 2017 and we are very pleased with progress, which has exceeded our planned expectations. Revenue in the first half year reached £8.4 million. We are very pleased with the growth in sales outside of the USA, where Nasty Gal predominated under its previous ownership, and this is supporting our view of 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 USA and UK initially.

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.

Customer interaction

The number of country-specific websites has been increased to six, with Canada and Ireland being added in the first half year. On social media we have 2.3 million followers on Instagram, 1.3 million Facebook likes and 0.2 million followers on Twitter.

Financial review

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

 

Group revenue by brand


6 months to 31 August 2017

6 months to 31 August 2016

Change

Change


£000

£000


CER

boohoo

181,824

127,316

+43%

+40%

PrettyLittleThing

72,675

-

-

-

Nasty Gal

8,376

-

-

-


262,875

127,316

+106%

+101%

For comparative purposes, PrettyLittleThing's revenue for the six months to 31 August 2016 was £18.7 million.

 

Group revenue by geographical market

 


6 months to 31 August 2017

6 months to 31 August 2016

Change

Change


£000

£000


CER

UK

163,381

81,696

+100%

+100%

Rest of Europe

27,791

14,713

+89%

+77%

USA

39,596

15,226

+160%

+145%

Rest of world

32,107

15,681

+105%

+89%


262,875

127,316

+106%

+101%

 

KPIs

boohoo

 


6 months to 31 August 2017

6 months to 31 August 2016

Change

 

Active customers(1)

5.8 million

4.5 million

+29%

Number of orders

 6.4 million

5.1 million

+26%

Order frequency(2)

2.11

2.11

-

Conversion rate to sale (3)

4.1%

3.9%

+20bps

Average order value(4)

£39.92

£37.16

+7%

Number of items per basket

3.17

2.86

+11%

 

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

 

PrettyLittleThing

 

 



6 months to 31 August

2017

6 months to 31 August 2016

Change

 

Active customers(1)


2.0 million

0.8 million

+150%

Number of orders


2.9 million

0.9 million

+222%

Order frequency(2)


2.22

1.86

+19%

Conversion rate to sale (3)


4.3%

3.4%

+90bps

Average order value(4)


£37.95

£30.43

+25%

Number of items per basket


2.10

2.10

-

 

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

 

 



 

Consolidated income statement

 


6 months to 31 August 2017

6 months to 31 August 2016

Change


£000

£000


Revenue

262,875

127,316

+106%

Cost of sales

(122,643)

(56,850)

+116%

Gross profit

140,232

70,466

+99%

Gross margin

53.3%

55.3%

-200bps





Distribution costs

(56,002)

(29,476)


Administrative expenses - operational

(62,046)

(28,389)


Administrative expenses - amortisation of acquired intangible assets and customer lists

 

(2,224)

 

-


Other income

53

1,452


Operating profit

20,013

14,053

+42%





Finance income

347

311


Finance expense

(78)

-


Profit before tax

20,282

14,364

+41%





Adjusted EBITDA

27,751

16,510

+68%

Adjusted EBITDA margin %

10.6%

13.0%

-240bps





Calculation of adjusted EBITDA




Operating profit

20,013

14,053


Depreciation and amortisation

5,181

2,004


Equity-settled share-based payment charge for shares in boohoo.com plc

1,139

453


Equity-settled share-based payment charge for existing shares in PrettyLittleThing.com Limited (see note 5)

1,418

-


Adjusted EBITDA

27,751

16,510


Gross margin reduced from 55.3% to 53.3%, primarily due to an increase in promotional activity, which has in turn increased sales growth.

Distribution costs have increased with revenue growth and reduced by 90bps like-for-like as a percentage of revenue. Administrative expenses, which include marketing expenses, have risen due to the combination of revenue growth, the investment in developing the newly acquired and rapidly growing brands and amortisation charges from the acquisitions of PrettyLittleThing and Nasty Gal.

Adjusted EBITDA increased by 68% from £16.5 million to £27.8 million and, as a percentage of revenue, decreased from 13.0% to 10.6%, due to the lower gross margin driving sales growth and investment in brand and infrastructure in growing our brands.



 

Taxation

 

The effective rate of tax for the half-year was 23.2% (2017: 20.6%), which is more than the blended UK statutory rate of tax for the year of 19.1% due to disallowable items, principally share-based payment charges in PrettyLittleThing.com Limited (2017: 20.1%).

 

Earnings per share

 

Basic earnings per share increased by 24% from 1.01p to 1.25p.

 

Consolidated statement of financial position



6 months to 31 August 2017

6 months to 31 August 2016



£000

£000

Intangible assets


33,385

4,403

Property, plant and equipment


49,116

26,188

Financial assets


175

339

Deferred tax asset


6,861

810

Non-current assets


89,537

31,740





Working capital


(17,068)

(4,789)

Financial liabilities


(11,513)

(11,349)

Cash and cash equivalents


129,910

67,056

Interest bearing loans and borrowings


(10,719)

-

Deferred tax liability


(2,348)

-

Current tax liability


(5,738)

(3,062)

Net assets


172,061

79,596

 

Intangible assets have increased by £29.0 million due to the acquisition of PrettyLittleThing.com Limited (£14.9 million) and the intellectual property of Nasty Gal (£16.1 million). Property, plant and equipment has risen by £22.9 million due to warehouse, IT and office investment.

 

Working capital has reduced primarily due to an increase in payables and accruals relating to our increased trading activity. Cash has increased from profits and the £50 million share placing in June 2017. The deferred tax asset has risen due to share based payment charges and the deferred tax liability increase relates to the acquisition of PrettyLittleThing.com Limited. Net assets have increased by £92.5 million (+116%).



 

Liquidity and financial resources

Free cash flow was £12.8 million compared to £10.6 million in the previous financial half-year. Capital expenditure was £20.2 million, which includes £1.6 million of IT investment, £9.2 million investment in offices and a £9.4 million warehouse investment. The closing cash balance for the group was £129.9 million, after a £50 million share placing.

 

Consolidated cash flow statement




 



6 months to 31 August 2017

6 months to 31 August 2016



£000

£000





Profit for the period


15,584

11,339





Depreciation charges and amortisation


5,181

2,004

Share-based payments charge


2,557

453

Tax expense


4,698

3,025

Finance income


(347)

(311)

Finance expense


78

-

Increase in inventories


(19,295)

(6,356)

Increase in trade and other receivables


(5,218)

(4,451)

Increase in trade and other payables


29,738

11,493

Capital expenditure and intangible asset purchases


(20,217)

(6,627)

Free cash flow


12,759

10,569





Proceeds from the issue of ordinary shares


50,944

-

Finance income received


253

171

Finance expense paid


(78)

-

Tax paid


(3,098)

(1,965)

Unrealised currency translation movements


(9)

-

Repayment of borrowings


(1,191)

-

Net cash flow


59,580

8,775





Cash and cash equivalents at beginning of period


70,330

58,281

Cash and cash equivalents at end of period


129,910

67,056







 

Outlook

We continue to maintain a highly positive outlook for on-line fashion. The group has evolved into a multi-brand business with brands appealing to a wide consumer audience. The demand for affordable fashion continues unabated and affords us the opportunity for continued growth globally. Growth in the UK, our largest market, remains strong, whilst international growth continues at a higher rate as we gain market share. Our focus is concentrated on keeping the customer proposition outstanding, with the best fashion at great prices, supported by excellent customer service and driven from the most appealing websites and supported by engaging social media.

We have made significant investments in an improved website platform, added new apps, upgraded IT systems, expanded our warehouse and added new office space. Planning is underway for warehouse automation and for the construction of additional new warehouse facilities for medium to long term growth.

 

 

 

Mahmud Kamani

Carol Kane

Neil Catto




Joint Chief Executive

Joint Chief Executive

Chief Financial Officer

 

 

26 September 2017

Unaudited consolidated statement of comprehensive income

for the period ended 31 August 2017


Note

6 months to 31 August 2017

6 months to 31 August 2016

12 months to 28 February 2017



£000

£000

£000

Revenue

3

262,875

127,316

294,635

Cost of sales


(122,643)

(56,850)

(133,806)

Gross profit


140,232

70,466

160,829






Distribution costs


(56,002)

(29,476)

(66,849)

Administrative expenses


(64,270)

(28,389)

(68,534)

Other income

4

53

1,452

4,862

Operating profit


20,013

14,053

30,308






Finance income


347

311

637

Finance expense


(78)

-

-

Profit before tax

5

20,282

14,364

30,945






Taxation


(4,698)

(3,025)

(6,284)






Profit for the period


15,584

11,339

24,661






Profit for the period attributable to:





Shareholders of the holding company


14,146

11,339

24,458

Non-controlling interest


1,438

-

203



15,584

11,339

24,661







 

Net fair value gain/(loss) on cash flow hedges 1


249

(6,170)

(6,747)

Total comprehensive income for the period


15,833

5,169

17,914






Total comprehensive income attributable to:





Shareholders of the holding company


14,395

5,169

17,711

Non-controlling interest


1,438

-

203



15,833

5,169

17,914






Earnings per share

6




Basic


1.25p

1.01p

2.19p

Diluted


1.22p

1.00p

2.16p

 

1.        Net fair value gains/losses on cash flow hedges will be reclassified to profit or loss during the two years to 31 August 2019.

 

 

 

 



 


Unaudited consolidated statement of financial position

at 31 August 2017


Note


6 months to 31 August 2017

6 months to 31 August 2016

12 months to 28 February 2017

                                                                     



£000

£000

£000

Assets






Non-current assets






Intangible assets



33,385

4,403

35,446

Property, plant and equipment



49,116

26,188

32,019

Financial assets



175

339

231

Deferred tax

7


6,861

810

4,494




89,537

31,740

72,190

Current assets






Inventories



53,465

25,025

34,170

Trade and other receivables

8


17,258

11,692

11,944

Financial assets



1,123

92

489

Cash and cash equivalents



129,910

67,056

70,330

Total current assets



201,756

103,865

116,933







Total assets



291,293

135,605

189,123







Liabilities






Current liabilities






Trade and other payables

9


(87,791)

(41,506)

(58,053)

Interest bearing loans and borrowings



(2,382)

-

(2,382)

Financial liabilities



(8,576)

(8,564)

(10,229)

Current tax liability



(5,738)

(3,062)

(3,761)

Total current liabilities



(104,487)

(53,132)

(74,425)







Non-current liabilities






Interest bearing loans and borrowings



(8,337)

-

(9,528)

Financial liabilities



(4,060)

(2,877)

(2,077)

Deferred tax

7


(2,348)

-

(2,597)







Total liabilities



(119,232)

(56,009)

(88,627)







Net assets



172,061

79,596

100,496







Equity






Share capital

10


11,494

11,233

11,233

Share premium



601,994

551,720

551,720

Capital redemption reserve



100

100

100

Hedging reserve



(11,337)

(11,009)

(11,586)

EBT reserve



(352)

(761)

(761)

Translation reserve



(4)

3

5

Reconstruction reserve



(515,282)

(515,282)

(515,282)

Non-controlling interest



5,416

-

3,978

Retained earnings



80,032

43,592

61,089

Total equity      



172,061

79,596

100,496

 



 

Unaudited consolidated statement of changes in equity


Share

capital

Share  premium

Capital redemption reserve

Hedging reserve

EBT reserve

Transla-tion reserve

Recon-struction reserve

Non-controlling interest

Retained earnings

Total

equity


£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance at 1 March 2017

11,233

551,720

100

(11,586)

(761)

5

(515,282)

3,978

61,089

100,496

Issue of shares

50,683

-

-

-

-

-

-

-

50,944

Issue of shares by EBT

(409)

-

-

409

-

-

-

-

-

Share-based payments credit

-

-

-

-

-

-

-

2,557

2,557

Excess deferred tax on  share-based payment charge

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

2,240

 

2,240

Profit for the period

-

-

-

-

-

-

1,438

14,146

15,584

Translation of foreign operations

-

-

-

-

(9)

-

-

-

(9)

Other comprehensive income

-

-

-

249

-

-

-

-

-

249

Balance at 31 August 2017

11,494

601,994

100

(11,337)

(352)

(4)

(515,282)

5,416

80,032

172,061

 

 






















Balance as at 1 March 2016

11,233

551,666

100

(4,839)

(761)

1

(515,282)

-

31,309

73,427

Issue of shares

54

-

-

-

-

-

-

-

54

Share-based payment charge

-

-

-

-

-

-

-

399

399

Excess deferred tax on share-based payment charge

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

545

 

545

Profit for the period

-

-

-

-

-

-

203

11,339

11,339

Translation of foreign operations

-

-

-

-

2

-

-

-

2

Other comprehensive expense

-

-

(6,170)

-

-

-

-

-

(6,170)

Balance at 31 August 2016

11,233

551,720

100

(11,009)

(761)

3

(515,282)

3,978

43,592

79,596

 

Balance at 1 March 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

Other comprehensive expense

-

-

-

(6,747)

-

-

-

-

-

(6,747)

Balance at 28 February 2017

11,233

551,720

100

(11,586)

(761)

5

(515,282)

3,978

61,089

100,496

 



 

Unaudited consolidated cash flow statement

for the period ended 31 August 2017

 


Note


6 months to 31 August 2017

6 months to 31 August 2016

12 months to 28 February 2017




£000

£000

£000

Cash flows from operating activities






Profit for the period



15,584

11,339

24,661

Adjustments for:






Share-based payments charge



2,557

399

1,895

Depreciation charges and amortisation



5,181

2,004

4,765

Unrealised currency translation movements



(9)

-

-

Gain on option to acquire PrettyLittleThing.com Limited



-

-

(1,405)

Finance income



(347)

(311)

(637)

Finance expense



78

-

-

Tax expense



4,698

3,025

6,284



27,742

16,456

35,563







Increase in inventories



(19,295)

(6,356)

(11,925)

Increase in trade and other receivables

8


(5,218)

(4,451)

(4,107)

Increase in trade and other payables

9


29,738

11,493

15,166

Cash generated from operations



32,967

17,142

34,697







Tax paid



(3,098)

(1,965)

(5,206)

Net cash generated from operating activities



29,869

15,177

29,491







Cash flows from investing activities






Acquisition of intangible assets



(1,405)

(736)

(18,311)

Acquisition of tangible property, plant and equipment



(18,812)

(5,891)

(12,364)

Acquisition of 66% interest in PrettyLittleThing.com Limited


-

-

655

Finance income



253

171

614

Finance expense



(78)

-

-

Net cash used in investing activities



(20,042)

(6,456)

(29,406)







Cash flows from financing activities






Proceeds from the issue of ordinary shares



51,694

54

54

Share issue costs written off to share premium



(750)

-

-

Repayment of loan



(1,191)

-

-

Proceeds from new loan



-

-

11,910

Net cash generated from financing activities



49,753

54

11,964







Increase in cash and cash equivalents



59,580

8,775

12,049







Cash and cash equivalents at beginning of period



70,330

58,281

58,281

Cash and cash equivalents at end of period



129,910

67,056

70,330

 



 

Notes

(forming part of the interim report and accounts)

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

The interim condensed financial statements for the six months ended 31 August 2017 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 Annual Report and Accounts for the year ended 28 February 2017, 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 (Jersey) Law 1991 applicable to companies reporting under IFRS.

The interim condensed financial statements contained in this report are not audited and do not constitute statutory accounts within the meaning of Companies (Jersey) Law 1991. The Annual Report and Accounts for the year ended 28 February 2017 has been filed with the Jersey Companies Registry. The auditors' reports on those accounts was unqualified and did not include reference to any matters on which the auditors were required to report by exception under Companies (Jersey) Law 1991.

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 and Financial Reviews. The Financial Review describes the group's financial position, cash flows and bank facilities.

The interim financial statements are unaudited and were approved by the board of directors on 26 September 2017.

 

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.

Accounting policies

The interim financial statements have been prepared in accordance with the accounting policies set out in the group's Annual Report and Accounts for the year ended 28 February 2017.

 

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 2018 to be unchanged from those set out in the group's Annual Report and Accounts for the year ended 28 February 2017, which in summary are: competition risk; fashion and consumer demands risk; systems and technical risk; supply chain risk; loss of key facilities; people risk; customer dissatisfaction; and financial risk. These are set out in detail on pages 22 to 24 of the group's Annual Report and Accounts for the year ended 28 February 2017, a copy of which is available on the group's website, www.boohooplc.com.

 

3              Segmental analysis

 



6 months ended 31 August 2017





boohoo

PrettyLittleThing

Nasty Gal

Total




£000

£000

£000

£000

Revenue



181,824

72,675

8,376

262,875








Cost of sales



(86,751)

(32,859)

(3,033)

(122,643)

Gross profit



95,073

39,816

5,343

140,232








Distribution costs



(38,514)

(15,636)

(1,852)

(56,002)

Segment result



56,559

24,180

3,491

84,230








Administrative expenses



-

-

-

(64,270)

Other income



-

-

-

53

Operating profit



-

-

-

20,013








Finance income



-

-

-

269

Profit before tax



-

-

-

20,282



 

6 months ended 31 August 2016


 







boohoo

 







£000

 

Revenue






127,316

 








 

Cost of sales






(56,850)

 

Gross profit






70,466

 








 

Distribution costs






(29,476)

 

Segment result






40,990

 








 

Administrative expenses






(28,389)

 

Other income






1,452

 

Operating profit






14,053

 








 

Finance income






311

 

Profit before tax






14,364

 

 



Year ended 28 February 2017




boohoo

PrettyLittleThing

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

Profit before tax



-

-

30,945



 

Revenue by geographic region



6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017



£000

£000

£000

UK


163,381

81,696

181,981

Rest of Europe


27,791

14,713

34,735

USA


39,596

15,226

40,435

Rest of world


32,107

15,681

37,484



262,875

127,316

294,635

 

4             Other income



6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017



£000

£000

£000

Rent


53

-

-

Income from warehouse management services


-

1,452

3,457

Gain on option to acquire PrettyLittleThing.com Limited


-

-

1,405



53

1,452

4,862

 

5              Profit before tax

Profit before tax is stated after charging:

6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017


£000

£000

£000

Operating lease rentals for buildings

523

383

1,060

Depreciation of property, plant and equipment

1,715

1,129

2,488

Amortisation of intangible assets

1,242

875

2,277

Amortisation of acquired intangible assets and customer lists

2,224

-

-

Equity-settled share-based payment charges - boohoo.com plc shares

1,139

453

1,895

National insurance on share-based payment charges - boohoo.com plc shares

1,388

-

1,654

Equity-settled share-based payment charges - directors' existing shareholdings in PrettyLittleThing.com Limited

 

1,418

 

-

 

-

 

The equity-settled share-based payment charges in boohoo.com plc represent the cost of ESOP, LTIP, SIP and SAYE schemes settled with shares in boohoo.com plc. The equity-settled share-based payment charges in PrettyLittleThing.com Limited ["PLT"] represents the share-based payment charges relating to the shares directors in PLT are already holding (34% of PLT) and for which boohoo.com plc has an option to purchase at market value or less, depending on PLT's performance, in 2022.



 

 

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.

 



6 months to 31 August 2017

6 months to 31 August 2016

Year to 28 February 2017

Weighted average shares in issue for basic earnings per share


1,132,106,923

1,119,210,360

1,118,177,098

Dilutive share options


26,154,173

17,655,714

16,269,059

Weighted average shares in issue for diluted earnings per share


1,158,261,095

1,136,866,074

1,134,446,158






Earnings (£000)


14,146

11,339

24,458

Basic earnings per share


1.25p

1.01p

2.19p

Diluted earnings per share


1.22p

1.00p

2.16p

 

7              Deferred tax

 

Assets

 

Depreciation in excess of capital allowances

Share-based payments

Total


£000

£000

£000

At 1 March 2016

62

169

231

At 1 September 2016

32

778

810

At 1 March 2017

232

4,262

4,494

Recognised in statement of comprehensive income

(44)

171

127

Credit in equity

-

2,240

2,240

At 31 August 2017

188

6,673

6,861

 

Liabilities

 

 


Business combinations

Total



£000

£000

At 1 March 2017


(2,597)

(2,597)

Recognised in statement of comprehensive income


249

249

At 31 August 2017


(2,348)

(2,348)

 

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.

 

8              Trade and other receivables


6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017


£000

£000

£000

Amounts due from related party undertakings

-

685

-

Trade and other receivables

14,761

6,923

9,446

Prepayments and accrued income

2,497

4,084

2,498


17,258

11,692

11,944

 

 

9              Trade and other payables

 


6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017


£000

£000

£000

Trade payables

29,545

11,586

23,124

Amounts owed to related party undertakings

1

-

2

Other payables

2,585

1,925

3,090

Accruals and deferred income

51,732

24,921

27,465

Taxes and social security payable

3,928

3,074

4,372


87,791

41,506

58,053

 

 

10           Share capital


6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017


£000

£000

£000

At start of period

11,233

11,233

11,233

Share issues

261

-

-

At end of period

11,494

11,233

11,233

Share capital at period end: 1,149,419,722 authorised and fully paid ordinary shares of 1p each (2017: 1,123,267,330). No dividends have been paid or are payable for the period ended 31 August 2017 (2017: £nil).

 

 

20           Capital commitments

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


6 months to 31 August 2017

6 months to 31 August 2016

Year to

28 February 2017


£000

£000

£000

Property, plant and equipment

17,449

-

2,100

 

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 brands and trading names. 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 31 August 2017, there are no pending claims or proceedings against the group which are expected to have material adverse effect on its liquidity or operations.

Appendix - prior period revenues by region

 

Revenue by period for the six months to 31 August 2017

 

£'000

3m to 31 May

3m to 31 August

6m to 31 August


FY18

FY17

yoy %

yoy % CER

FY18

FY17

yoy %

yoy %

CER

FY18

FY17

yoy %

 

yoy %

CER

Total

120,077

58,222

106%

98%

142,798

69,094

107%

104%

262,875

127,316

106%

101%










Sales by region









 UK

74,532

37,396

99%

99%

88,849

44,300

101%

101%

163,381

81,696

100%

100%

 ROE

12,220

6,938

76%

61%

15,571

7,775

100%

92%

27,791

14,713

89%

77%

 USA

17,906

6,385

180%

155%

21,690

8,841

145%

136%

39,596

15,226

160%

145%

 ROW

15,419

7,503

105%

80%

16,688

8,178

104%

98%

32,107

15,681

105%

89%

 

 

Revenue by period for the year to 28 February 2017

 

£'000

3m to 31 May

3m to 31 August

6m to 31 August


FY17

FY16

yoy %

yoy % CER

FY17

FY16

yoy %

yoy %

CER

FY17

FY16

yoy %

 

yoy %

CER

Total

58,222

41,322

41%

42%

69,094

49,462

40%

40%

127,316

90,784

40%

41%










Sales by region









 UK

37,396

26,273

42%

42%

44,300

32,855

35%

35%

81,696

59,128

38%

38%

 ROE

6,938

4,943

40%

43%

7,775

5,460

42%

40%

14,713

10,403

41%

41%

 USA

6,385

3,815

67%

60%

8,841

4,086

116%

100%

15,226

7,901

93%

81%

 ROW

7,503

6,291

19%

27%

8,178

7,061

16%

27%

15,681

13,352

17%

27%

 

£'000

4m to 31 December

2m to 28 February

12m to 28 February


FY17

FY16

yoy %

yoy % CER

FY17

FY16

yoy %

yoy %

CER

FY17

FY16

yoy %

 

yoy %

CER

Total

114,294

73,692

55%

52%

53,025

30,918

72%

67%

294,635

195,394

51%

49%










Sales by region









 UK

65,465

49,701

32%

32%

34,820

21,267

64%

64%

181,981

130,096

40%

40%

 ROE

13,963

8,588

63%

54%

6,059

3,639

67%

47%

34,735

22,630

53%

47%

 USA

19,299

5,962

224%

183%

5,910

2,660

122%

105%

40,435

16,523

145%

124%

 ROW

15,567

9,441

65%

56%

6,236

3,352

86%

74%

37,484

26,145

43%

45%

 

 

 

 

 

CER in this appendix for the year ended 28 February 2017 is calculated using exchange rates prevailing during the year ending 28 February 2017.

Nomenclature: ROE - rest of Europe; ROW - rest of world; yoy - year-on-year; CER - constant exchange rate

 


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