Boohoo.com posts strong full-year results despite fierce high street competition
Online fashion retailer Boohoo.com posted strong full-year results despite a weak first-half due to a warm autumn season.
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Total revenues rose 27% to £139.85m, driven by strong UK revenues, which were up by 33% to £94.34m. The first half of the year was stronger than the second one due to heavy discounting by UK high street retailers during the unseasonally autumn season.
Despite the impact of the weakening euro, the European market grew by 39% to £18m thanks to a re-pricing strategy to fight competition.
In the rest of the world, revenues were down 11% to during the first-half due to currency movements. However, during the last six months of the year, revenues grew 29%. In the end, the division reported £27.4m in revenues, which was 7% than the year before.
Profits before tax were 3% up to £11.06m, while earnings per share remained at 0.75p. Cash and equivalents increased significantly to £54.15m from £5.4m in 2013.
Womenswear, Boohoo's core business, continued to grow strongly, with dresses, tops and footwear driving sales up.
Meanwhile, menswear grew 39% and currently accounts 4.2% of total sales in the group, which sees the men's fashion a "significant opportunity for future growth".
Joint chief executives Mahmud Kamani and Carol Kane said: "We are pleased to report a year of significant progress on so many fronts. While delivering a result in line with our revised guidance, we have also taken major steps operationally to ensure boohoo is prepared for the anticipated growth ahead."
They added that the group is increasing its online market share. Driven by an increase of marketing spend, Kamani and Kane said the group has entered the new financial year with improved momentum in the UK.
N+1 Singer signal the marketing spending as a sign of "gathering confidence".
The broker noted the results, in absolute terms, were "disappointing when compared to forecasts from six months ago", but added that "they are fractionally better than revised market forecasts and the key development projects were completed on time and to budget".
"Alongside enhancements to range and pricing, Boohoo has significantly greater capability than it did a year ago."
Looking ahead, Shore Capital analysts anticipate a "more diverse revenue mix" due to an increase in womenswear products and expects the group to make "further forays into the value end of the menswear market", following the announcement of a tailored range for August.
Shares in Boohoo.com were down 0.89% to 27.75p on Wednesday at 11:43.