Source - RNS
RNS Number : 8643K
boohoo.com plc
27 September 2016
 

For Immediate Release                                                                 27 September 2016

 

 

boohoo.com plc - Interim results for the six months ended 31 August 2016

 

"The Global Fashion Leader for a Social Generation"

 

£000

6 months ended   

6 months ended    

Change

 

31 August 2016

31 August 2015

 

Revenue

127,316

90,784

+40%

Gross profit

70,466

54,539

+29%

  Gross margin

55.3%

60.1%

-480bps

Operating profit

14,053

5,976

+135%

EBITDA (adjusted)(1)

16,510

7,613

+117%

Profit before tax

14,364

6,270

+129%

Cash at period end

67,056

60,360

+£6,696

Earnings per share

1.01p

0.45p

+124%

 (1): EBITDA (adjusted) excludes equity-settled share based payment costs of £0.5m (2015: £0.3m)

 

Highlights for the six months to 31 August 2016

·     Revenue up 40% (41% CER(2))

UK up 38%, rest of Europe up 41% (41% CER), USA up 93% (81% CER), rest of world up 17% (27% CER)

International now represents 36% of total revenue

·     Gross margin 55.3%, down 480bps (350bps due to planned investment in price and promotions, with retail gross margin being 57.0%; and 130bps due to third party(3) revenue)

·     EBITDA (adjusted) was 13% of revenue (2015: 8.4%), reflecting efficiency improvements

·     Broader product range driving growth

·     4.5m active customers(4), up 28% on prior year

·     Strong balance sheet with net cash of £67m

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

 (3): Third party includes revenue from other channels and wholesale sales to retailers

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

 

Mahmud Kamani and Carol Kane, joint CEOs, commented:

"We are pleased to report a strong performance in the first half of the year, with robust growth across all regions and continued momentum in new customer growth.

Our inclusive brand, unbeatable choice, together with our incredible prices and fantastic service, continue to inspire and appeal to young customers around the world. Through our constant focus on what matters to our customers, together with our investment in technology and operational improvements, we will continue to deliver profitable growth.

 As a result of our continued momentum in the UK and encouraging growth in selected overseas markets, we now expect revenue growth for the full year of between 30% and 35%, reflecting tougher second half comparatives.  Following the success in the first half of the year we will continue to look for opportunities to invest in marketing campaigns and our customer proposition to drive future sales growth and improve customer lifetime value. We will also be making significant investments in our IT systems and Ecommerce platforms. Consequently EBITDA margin for the full year is expected to be around 11%."

 

Investor and Analyst Meeting

A meeting for investors and analysts will be held at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN on 27 September 2016, commencing at 9.00am. A webcast will be available following the presentation via the following link: http://vm.buchanan.uk.com/2016/boohoo270916/registration.htm

 

boohoo.com plc's Interim Results 2017 are available at www.boohooplc.com .

 

Enquiries

boohoo.com plc

Neil Catto, Chief Financial Officer

 

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

 

 

Buchanan - Financial PR adviser

Richard Oldworth

Madeleine Seacombe 

Tel: +44 (0)20 7466 5000

[email protected]

 

 

Zeus Capital - Nominated adviser and joint broker

Nick Cowles/Andrew Jones (Corporate Finance)

Benjamin Robertson/ John Goold (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

 

 

About boohoo.com

"24/7 Global Fashion"

 

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

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

 

www.boohoo.com

www.boohoo.com/newz/page/home

fr.boohoo.com

www.boohoo.com/europe/page/home

www.boohoo.com/sweden/page/home

de.boohoo.com

www.boohoo.com/usa/page/home

www.boohoo.com/denmark/page/home

it.boohoo.com

www.boohoo.com/canada/page/home

www.boohoo.com/norway/page/home

nl.boohoo.com

www.boohoo.com/aus/page/home

 

es.boohoo.com

 

This announcement has been determined to contain inside information. 

 

 

Business review

 

Performance during the 6 months to 31 August 2016

Revenue growth across all geographic regions continued at a strong pace. In the UK, our largest market, revenue growth was 38%, whilst in Europe growth was 41% (CER 41%). The USA continued to grow very strongly at 93% (CER 81%) and rest of the world growth was 17% (CER 27%).

Currency exchange movements since the EU referendum have not significantly affected results due to foreign exchange hedges placed several months earlier in accordance with our rolling hedging programme, although weaker sterling does provide the opportunity to use promotional activity to generate incremental international sales over and above hedged transactions. With an element of many product prices being dollar-based, it remains to be seen what the longer term effect of continued sterling weakness might be in the supply chain.

Gross margin was 55.3% (2015: 60.1%) reducing by 480bps, of which 350bps was in line with our strategy of increased investment in price and promotions. A further 130bps was driven by a greater proportion of lower margin third party sales (revenue from other channels and wholesale sales to retailers). Retail gross margin was 57.0% (2015: 60.5%). Marketing expenditure decreased to 6.3% of revenue compared to 12.6% in the comparable half year, as we stimulated growth through greater use of price and delivery promotions.

Adjusted EBITDA was £16.5 million (2015: £7.6 million), an increase of 117% on the prior year, and profit before tax was £14.4 million (2015: £6.3 million), an increase of 129%.

Fashion

We aim to be the best-priced brand in fashion and with a range of over 20,000 styles we always have something to offer every taste in style and from the latest trends. With 100 new styles on site every day, the offering is continuously fresh and exciting. Our test-and-repeat model reduces stock holding risk, whilst rapid response enables us to reorder strong selling lines to quickly satisfy demand.

Our core womenswear ranges of dresses, tops, jackets and footwear have continued to perform strongly, whilst other products from the expanded range are generating robust revenue growth: plus-size and petite have grown strongly and attained a high level of revenue and the more recently-introduced tall and lingerie ranges have made a very promising start.

Fashion advice and lifestyle commentary is energetically presented in the "Stylefix" section of the website. Here, female customers can enjoy keeping up with fashion trends in a highly engaging lifestyle media stream, watch videos and read interesting articles by bloggers.

Our menswear range is expanding and, since early 2016, has been sold from a separate menswear website in addition to the main site. This has enabled us to offer a proposition more relevant to the male audience, with added celebrity contributions, fashion advice and lifestyle articles in the "Manual" section. Menswear is showing great promise, with monthly sales at the end of the first half double those at the start, and continuing to grow strongly.

In the second half year we will be introducing a range of children's clothing for girls and boys in the 5 to 12 age range and also a small maternity range.

Marketing

Marketing activity has continued with the highly successful "WeAreUs" campaigns, through TV, media events and social media channels. Bloggers and influencers also contribute via social media to generate an inclusive and engaging experience for our social media savvy customers, with great photography and interesting articles promoting the brand and the latest products. Our "Style Squads" comprise over 60 bloggers and influencers across our key geographic markets.

 

In July we announced another celebrity fashion collaboration with international curve model and blogger Jordyn Woods, which we expect will be highly effective in the growing US market. In August we held our launch party for this new collaboration in Los Angeles.  The event was covered extensively in the media and attracted many celebrities and influencers including Kylie Jenner, Jaden Smith and Hailey Baldwin.  In April we staged pop-up shops, one in Los Angeles, generating much interest in California amongst the extensive student population, and one in Paris, supporting the growing French market. In the UK we sponsored Graduate Fashion Week and staged a number of media events, driving further awareness of the brand.

In early spring we launched the boohooMAN.com website, with the reality TV personality and celebrity Big Brother contestant Scotty T fronting promotional activity. This has contributed to an acceleration in menswear sales, supported by a continuously increasing product range and marketing activity focussed on the young male audience. We have also started a series of shoots with key influencers, the latest being with actor and P-Diddy's stepson, Quincy Brown.

Improvements in the efficiency of our acquisition marketing spend have also been realised with the use of more advanced analytical tools and techniques. We have also stepped up our activity on social media on Facebook Live and on Snapchat and a content drive on Instagram has helped us pass the 2 million follower mark in the UK.

Customer interaction

Active customers, who shopped with us in the 12 months to 31 August 2016, rose to 4.5 million, an increase of 28% on the same period a year ago. The number of website sessions grew strongly by 32% on the previous 12 months to 241 million sessions.  Order frequency has risen by 7.7%, with customers buying, on average, 2.1 times in 12 months and conversion rate to sale improved from 3.8% to 3.9% of sessions. On social media we have 0.5 million followers on Twitter and a reach of 7.9 million, 3.8 million followers on Instagram, 2.3 million Facebook likes and a reach of 2.8 million and 3.2 million views recorded on YouTube.

Our multi-lingual customer service team responds to customer queries from a variety of platforms and aims for excellence in response time and problem resolution. Our performance is constantly measured internally and we monitor external customer review websites such as Trustpilot to ensure we maintain best-in-class standards. We have introduced web-chat in the UK, which is proving highly effective and is receiving a high satisfaction rating from customers.

boohoo.com customers are able to choose from a range of delivery options, which we are constantly refining as new opportunities become available. We operate a midnight cut-off for next day delivery, Sunday delivery and collect+ returns in the UK. In the second half of the year we have introduced boohoo Premier, which offers an unlimited next day delivery service in the UK for an annual fee, and has received a very favourable customer response.

Technology

The Android and iPhone Apps introduced in the UK, USA and Australia in early spring are being utilised increasingly by customers, with 1.4 million downloads to date. Mobile and tablet use continues to rise and now accounts for 72% of sessions.

We are planning to expand the number of market places in which we are present in the second half and to improve personalisation by territory and device to enhance the customer experience.

These new channels are facilitated by our systems architecture, built around the concept of multiple customer channels supported with common infrastructure. Around this architecture, we will make significant investments in the latest sophisticated and most stable platforms in the second half of the year. On-going refinements contribute to an ever-improving customer experience.

Warehouse

Three more mezzanine floor layers, expanding capacity by another 275,000 square feet to 525,000 square feet total capacity, are now in use in the warehouse, with capacity sufficient for medium term future growth. A second warehouse extension, which will incorporate a significant amount of automation, is now at the planning stage.

People

Sara Murray joined the board as a non-executive director in April and Mark Newton-Jones stepped down from the board in July. We thank Mark for his contribution during a key developmental phase of the company's history.

The senior management team remained unchanged during the period, following a number of senior appointments last year. We appointed a number of skilled middle-management positions and undertook several large-scale training and development programmes as part of our up-skilling and retention policy for staff development.

The rate of growth in revenue has required an increase in personnel in the volume-related functions in customer service and warehousing. The total permanent workforce now stands at 1,235, up from 1,015 at 29 February 2016.

Pretty Little Thing

The company has an option to acquire the business of "PrettyLittleThing" before March 2017 and management is evaluating all aspects of a potential acquisition, the related management incentive and how the business will be best integrated and managed as part of the boohoo group.
 

Financial review

We have continued to drive strong customer growth through our price, promotional and marketing strategy in the first half of the year, whilst achieving good margins. By leveraging overheads, our profitability has also improved.

 

Sales revenue by geographical market

 

6 months to

31 August

2016

6 months to 31 August 2015

Change

Change

 

£000

£000

 

CER

UK

81,696

59,128

+38%

+38%

Rest of Europe

14,713

10,403

+41%

+41%

USA

15,226

7,901

+93%

+81%

Rest of world

15,681

13,352

+17%

+27%

 

127,316

90,784

+40%

+41%

 

In sterling equivalent and at constant exchange rates (CER), all regions showed robust growth compared with the same period last year.

 

KPIs

 

6 months to 31 August 2016

6 months to

31 August 2015

Change

Active customers(1)

4.5 million

3.5 million

+28%

Number of orders

5.1 million

3.8 million

+32%

Order frequency(2)

2.11

1.96

+7.7%

Conversion rate to sale (3)

3.9%

3.8%

+10bps

Average order value(4)

£37.16

£33.91

+9.6%

Number of items per basket

2.86

2.74

+4.4%

 

(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

Our business is continuing to attract new customers and retain existing customers, with active customer numbers increasing by 28% compared to the comparative period in FY16. Customers are buying more often from us, with order frequency increasing by 7.7% to an average of 2.11 purchases in a year, and conversion rates have also increased to 3.9%. Average order value has risen by 9.6% to £37.16, whilst the number of items per basket increased by 4.4% to 2.86.

 

  

Consolidated income statement

 

 

6 months to 31 August 2016

6 months to 31 August 2015

Change

 

 

£000

£000

 

 

Revenue

127,316

90,784

40%

 

Cost of sales

(56,850)

(36,245)

 

 

Gross profit

70,466

54,539

29%

 

Gross margin

55.3%

60.1%

 

 

 

 

 

 

 

Distribution costs

(29,476)

(21,513)

 

 

Administrative expenses

(28,389)

(27,409)

 

 

Other income

1,452

359

 

 

Operating profit

14,053

5,976

135%

 

 

 

 

 

 

Finance income

311

294

 

 

Profit before tax

14,364

6,270

129%

 

 

 

 

 

 

 

 

 

 

 

Calculation of EBITDA (adjusted)

 

 

 

 

Operating profit

14,053

5,976

 

 

Depreciation and amortisation

2,004

1,363

 

 

Share-based payments

453

274

 

 

EBITDA (adjusted)

16,510

7,613

117%

 

 

             

             

 

 

Reported gross margin reduced from 60.1% to 55.3%, due to keener pricing and higher promotional discounts driving demand and an increased proportion of lower margin third party sales.

Distribution costs and certain administrative expenses have increased due to sales volume-related costs, whilst the remaining overheads have decreased as a percentage of revenue.

EBITDA (adjusted) increased by 117% from £7.6m to £16.5m.
 

Statement of financial position

 

 

At 31 August 2016

At 31 August 2015

 

 

£000

£000

Intangible assets

 

4,403

4,479

Property, plant and equipment

 

26,188

15,277

Financial assets - foreign exchange contracts

 

339

-

Deferred tax

 

810

101

Non-current assets

 

31,740

19,857

 

 

 

 

Working capital

 

(4,789)

(8,407)

Net financial (liabilities)/assets - foreign exchange contracts

 

(11,349)

1,406

Cash and cash equivalents

 

67,056

60,360

Current tax liability

 

(3,062)

(1,316)

 

 

 

 

Net assets

 

79,596

71,900

 

Net assets have increased by £7.7m compared to 12 months ago. The movement in working capital was less negative than 12 months ago due to taking early settlement discounts from suppliers and higher receivables from third party sales.

 

 

Liquidity and financial resources

Free cash flow was £10.6m compared to £7.4m in H1 2016. In the first half of the year, inventories increased, due to the requirement to hold more products to serve our growing customer base, and receivables, payables and accruals increased in line with trading activity. Capital expenditure was £6.6m as we have continued to invest in our warehouse and IT systems to support projected growth in trade. The closing cash balance was £67.1m.

 

Consolidated cash flow statement

 

 

 

 

 

 

6 months to 31 August 2016

6 months to 31 August 2015

 

 

£000

£000

 

 

 

 

Profit for the period

 

11,339

5,000

 

 

 

 

Depreciation charges and amortisation

 

2,004

1,363

Share-based payments charges

 

453

274

Tax expense

 

3,025

1,270

Finance income

 

(311)

(294)

Increase in inventories

 

(6,356)

(7,959)

Increase in trade and other receivables

 

(4,451)

(1,698)

Increase in trade and other payables

 

11,493

15,171

Capital expenditure

 

(6,627)

(5,704)

Free cash flow

 

10,569

7,423

 

 

 

 

Purchase of own shares by Employee Benefit Trust

 

-

(331)

Interest received

 

171

304

Tax paid

 

(1,965)

(1,182)

Net cash flow

 

8,775

6,214

 

 

 

 

Cash and cash equivalents at beginning of period

 

58,281

54,146

Cash and cash equivalents at end of period

 

67,056

60,360

 

 

 

 

                 

 

 

Fixed and intangible asset additions

 

 

At 31 August 2016

At 31 August 2015

 

 

£000

£000

IT intangible assets

 

736

628

Warehouse extension

 

4,129

4,736

Office buildings

 

998

-

IT equipment, office fixtures and fittings

 

764

340

 

 

6,627

5,704

 

Outlook

 

We are pleased to report a strong performance in the first half of the year, with robust growth across all regions and continued momentum in new customer growth.

Our inclusive brand, unbeatable choice, together with our incredible prices and fantastic service, continue to inspire and appeal to young customers around the world. Through our constant focus on what matters to our customers, together with our investment in technology and operational improvements, we will continue to deliver profitable growth.

 As a result of our continued momentum in the UK and encouraging growth in selected overseas markets, we now expect revenue growth for the full year of between 30% and 35%, reflecting tougher second half comparatives.  Following the success in the first half of the year we will continue to look for opportunities to invest in marketing campaigns and our customer proposition to drive future sales growth and improve customer lifetime value. We will also be making significant investments in our IT systems and Ecommerce platforms. Consequently EBITDA margin for the full year is expected to be around 11%.

 

 

Mahmud Kamani

Carol Kane

Neil Catto

 

 

 

Joint Chief Executive

Joint Chief Executive

Chief Financial Officer

 

 

27 September 2016
 

 

Unaudited consolidated statement of comprehensive income

for the 6 months ended 31 August 2016

 

 

 

 

 

 

 

Note

 

6 months to  

31 August 

2016

6 months to 31 August 2015

Year to

29 February

2016

 

 

 

£000

£000

£000

Revenue

3

 

127,316

Cost of sales

 

 

(56,850)

(36,245)

(82,483)

Gross profit

 

 

70,466

54,539

112,911

 

 

 

 

 

 

Distribution costs

 

 

(29,476)

(21,513)

(45,501)

Administrative expenses

 

 

(28,389)

(27,409)

(53,756)

Other income

4

 

1,452

359

1,392

Operating profit

 

 

14,053

5,976

15,046

 

 

 

 

 

 

Finance income

 

 

311

294

628

Profit before tax

 

 

14,364

6,270

15,674

 

 

 

 

 

 

Taxation

 

 

(3,025)

(1,270)

(3,236)

 

 

 

 

 

 

Profit for the period

 

 

11,339

5,000

12,438

 

 

 

 

 

 

 

 

 

 

Other comprehensive (expense)/income for the period, net of income tax

 

 

 

 

 

Items that may be subsequently reclassified to profit and loss:

 

 

 

 

 

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

 

 

(6,170)

584

(5,661)

Excess deferred tax on share-based payments

 

 

545

-

-

Items that will not be subsequently reclassified to profit and loss:

 

 

 

 

 

Translation of foreign entity balances

 

 

2

-

1

Total comprehensive income for the period

 

 

5,716

5,584

6,778

 

 

 

 

 

 

Earnings per share

6

 

 

 

 

Basic

 

 

1.01p

0.45p

1.11p

Diluted

 

 

1.00p

0.44p

1.10p

                 

 

All activities relate to continuing operations.

 

Unaudited consolidated statement of financial position

at 31 August 2016

 

Note

 

At 31

August

2016

At 31

August

2015

At 29

February

2016

 

 

 

£000

£000

£000

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

 

 

4,403

4,479

4,542

Property, plant and equipment

 

 

26,188

15,277

21,426

Financial assets - foreign currency hedge contracts

 

 

339

-

28

Deferred tax

7

 

810

101

231

 

 

 

31,740

19,857

26,227

Current assets

 

 

 

 

 

Inventories

8

 

25,025

19,147

18,669

Trade and other receivables

9

 

11,692

5,532

7,096

Financial assets - foreign currency hedge contracts

 

 

92

1,643

35

Cash and cash equivalents

 

 

67,056

60,360

58,281

Total current assets

 

 

103,865

86,682

84,081

 

 

 

 

 

 

Total assets

 

 

135,605

106,539

110,308

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

10

 

(41,506)

(33,086)

(30,013)

Financial liabilities - foreign currency hedge contracts

 

 

 

(8,564)

 

(237)

 

(4,291)

Current tax liability

 

 

(3,062)

(1,316)

(1,967)

Total current liabilities

 

 

(53,132)

(34,639)

(36,271)

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Financial liabilities - foreign currency hedge contracts

 

 

 

(2,877)

 

-

 

(610)

 

 

 

 

 

 

Total liabilities

 

 

(56,009)

(34,639)

(36,881)

 

 

 

 

 

 

Net assets

 

 

79,596

71,900

73,427

 

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

11

 

11,233

11,231

11,233

Share premium

 

 

551,666

551,612

551,666

Capital redemption reserve

 

 

100

100

100

Hedging reserve

 

 

(11,009)

1,406

(4,839)

EBT reserve

 

 

(761)

(761)

(761)

Translation reserve

 

 

3

-

1

Reconstruction reserve

 

 

(515,282)

(515,282)

(515,282)

Retained earnings

 

 

43,646

23,594

31,309

Total equity

 

 

79,596

71,900

73,427

 

 

 

Unaudited consolidated statement of changes in equity

for the 6 months ended 31 August 2016

 

 

Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Transla-tion reserve

Recon-struction reserve

Retained earnings

Total

equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance as at 1 March 2016

11,233

551,666

100

(4,839)

(761)

1

(515,282)

31,309

73,427

Share-based payment charge

-

-

-

-

-

-

-

453

453

Excess deferred tax on share-based payment charge

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

545

 

545

Profit for the period

-

-

-

-

-

-

-

11,339

11,339

Translation of foreign operations

-

-

-

-

-

2

-

-

2

Fair value loss on cash flow hedges

-

-

-

(6,170)

-

-

-

-

(6,170)

Balance at 31 August 2016

11,233

551,666

100

(11,009)

(761)

3

(515,282)

43,646

79,596

 

 

 

Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Transla-tion reserve

Recon-struction reserve

Retained earnings

Total

equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance as at 1 March 2015

11,231

551,612

100

822

(430)

-

(515,282)

18,320

66,373

Purchase of shares by EBT

-

-

-

-

(331)

-

-

-

(331)

Share-based payment charge

-

-

-

-

-

-

-

274

274

Profit for the period

-

-

-

-

-

-

-

5,000

5,000

Fair value gain on cash flow hedges

-

-

-

584

-

-

-

-

584

Balance at 31 August 2015

11,231

551,612

100

1,406

(761)

-

(515,282)

23,594

71,900

 

 

 

Called up share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Transla-tion reserve

Recon-struction reserve

Retained earnings

Total

equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance at 1 March 2015

11,231

551,612

100

822

(430)

-

(515,282)

18,320

66,373

Purchase of shares by EBT

-

-

-

-

(331)

-

-

-

(331)

Share-based payment charge

2

54

-

-

-

-

-

551

607

Profit for the year

-

-

-

-

-

-

-

12,438

12,438

Translation of foreign operations

-

-

-

-

-

1

-

-

1

Fair value loss on cash flow hedges

-

-

-

(5,661)

-

-

-

-

(5,661)

Balance at 29 February 2016

11,233

551,666

100

(4,839)

(761)

1

(515,282)

31,309

73,427

 

Unaudited consolidated cash flow statement

for the 6 months ended 31 August 2016

 

 

Note

 

6 months to 31 August 2016

6 months to 31 August 2015

Year to

29 February

2016

 

 

 

£000

£000

£000

Cash flows from operating activities

 

 

 

 

 

Profit for the period

 

 

11,339

5,000

12,438

Adjustments for:

 

 

 

 

 

Depreciation charges and amortisation

 

 

2,004

1,363

3,058

Share-based payment charge

 

 

453

274

607

Gain on sale of property, plant and equipment

 

 

-

-

(2)

Finance income

 

 

(311)

(294)

(628)

Tax expense

 

 

3,025

1,270

3,236

 

 

16,510

7,613

18,709

 

 

 

 

 

 

Increase in inventories

8

 

(6,356)

(7,959)

(7,481)

Increase in trade and other receivables

9

 

(4,451)

(1,698)

(3,243)

Increase in trade and other payables

10

 

11,493

15,171

12,098

Cash generated from operations

 

 

17,196

13,127

20,083

 

 

 

 

 

 

Tax paid

 

 

(1,965)

(1,182)

(2,627)

Net cash inflow from operating activities

 

 

15,231

11,945

17,456

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Acquisition of intangible assets

 

 

(736)

(628)

(1,488)

Acquisition of tangible property, plant and equipment

 

 

(5,891)

(5,076)

(12,123)

Proceeds from sale of property, plant and equipment

 

 

-

-

2

Finance income

 

 

171

304

619

Net cash used in investing activities

 

 

(6,456)

(5,400)

(12,990)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Purchase of own shares by EBT

 

 

-

(331)

(331)

Net cash used in financing activities

 

 

-

(331)

(331)

 

 

 

 

 

 

Increase in cash and cash equivalents

 

 

8,775

6,214

4,135

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

58,281

54,146

54,146

Cash and cash equivalents at end of period

 

 

67,056

60,360

58,281

 

 

Notes

(forming part of the interim report and accounts)

1              Basis of preparation

The interim condensed financial statements for the six months ended 31 August 2016 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 29 February 2016, 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 29 February 2016 have been filed with the Jersey Companies Registry. The auditors' reports on those accounts was unqualified, 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 2016.

Going concern

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

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

Accounting policies

The interim financial statements have been prepared in accordance with the accounting policies set out in the group's Annual Report and Accounts for the year ended 29 February 2016.

 

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 2017 to be unchanged from those set out in the group's Annual Report and Accounts for the year ended 29 February 2016, 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 19 to 21 of the group's Annual Report and Accounts for the year ended 29 February 2016, a copy of which is available on the group's website, www.boohooplc.com.

 

 

 

3              Segmental analysis

 

 

 

6 months to 31 August 2016

 

 

UK

Rest of Europe

USA

Rest of

world

Total

 

 

£000

£000

£000

£000

£000

Revenue

 

81,696

14,713

15,226

15,681

127,316

 

 

 

 

 

 

 

Cost of sales

 

(36,738)

(7,020)

(6,261)

(6,831)

(56,850)

Gross profit

 

44,958

7,693

8,965

8,850

70,466

 

 

 

 

 

 

 

Distribution expenses

 

(18,172)

(3,296)

(3,296)

(4,712)

(29,476)

Segment result

 

26,786

4,397

5,669

4,138

40,990

 

 

 

 

 

 

 

Administrative expenses

 

-

-

-

-

(28,389)

Other income

 

-

-

-

-

1,452

Operating profit

 

 

 

 

 

14,053

 

 

 

 

 

 

 

Finance income

 

-

-

-

-

311

Profit before tax

 

-

-

-

-

14,364

 

 

 

 

 

6 months to 31 August 2015

 

 

 

UK

Rest of

Europe

USA

Rest of

world

Total

 

 

 

£000

£000

£000

£000

£000

 

Revenue

 

59,128

10,403

7,901

13,352

90,784

 

 

 

 

 

 

 

 

 

Cost of sales

 

(23,843)

(4,482)

(2,806)

(5,114)

(36,245)

 

Gross profit

 

35,285

5,921

5,095

8,238

54,539

 

 

 

 

 

 

 

 

 

Distribution expenses

 

(13,165)

(2,694)

(1,973)

(3,681)

(21,513)

 

Segment result

 

22,120

3,227

3,122

4,557

33,026

 

 

 

 

 

 

 

 

 

Administrative expenses

 

-

-

-

-

(27,409)

 

Other income

 

-

-

-

-

359

 

Operating profit

 

 

 

 

 

5,976

 

 

 

 

 

 

 

 

 

Finance income

 

-

-

-

-

294

 

Profit before tax

 

-

-

-

-

6,270

 

 

 

 

 

 

 

 

Year to 29 February 2016

 

 

UK

Rest of

Europe

USA

Rest of

world

Total

 

 

£000

£000

£000

£000

£000

Revenue

 

130,096

22,630

16,523

26,145

195,394

 

 

 

 

 

 

 

Cost of sales

 

(56,149)

(9,955)

(6,079)

(10,300)

(82,483)

Gross profit

 

73,947

12,675

10,444

15,845

112,911

 

 

 

 

 

 

 

Distribution expenses

 

(27,838)

(5,711)

(3,938)

(8,014)

(45,501)

Segment result

 

46,109

6,964

6,506

7,831

67,410

 

 

 

 

 

 

 

Administrative expenses

 

-

-

-

-

(53,756)

Other income

 

-

-

-

-

1,392

Operating profit

 

 

 

 

 

15,046

 

 

 

 

 

 

 

Finance income

 

-

-

-

-

628

Profit before tax

 

-

-

-

-

15,674

4              Other income

 

6 months to 31 August 2016

6 months to

31 August 2015

Year to

29 February 2016

 

£000

£000

£000

Income from warehousing and customer services

1,452

-

1,033

Gift to group from director for benefit of employees

-

359

359

 

1,452

359

1,392

 

 

 

5              Profit before tax

 

Profit before tax is stated after charging:

 

 

6 months to 31 August 2016

6 months to 31 August 2015

Year to

29 February 2016

 

 

£000

£000

£000

Operating lease rentals for buildings

 

383

374

712

Depreciation

 

1,129

653

1,551

Amortisation

 

875

710

1,507

Share-based payment charge

 

453

274

607

 

 

 

 

6             Earnings per share

 

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

 

 

 

6 months to 31 August 2016

6 months to 31 August 2015

Year to

29 February 2016

Weighted average shares in issue for basic earnings per share

 

1,119,210,360

1,118,810,227

1,118,429,548

Dilutive share options

 

17,655,714

22,737,018

11,761,758

Weighted average shares in issue for diluted earnings per share

 

1,136,866,074

1,141,547,245

1,130,191,306

 

 

 

 

 

Earnings (£000)

 

11,339

5,000

12,438

Basic earnings per share

 

1.01p

0.45p

1.11p

Diluted earnings per share

 

1.00p

0.44p

1.10p

7              Deferred tax

 

 

Depreciation in excess of capital allowances

Share-based payments

Total

 

 

£000

£000

£000

At 1 March 2015

 

(12)

58

46

At 31 August 2015

 

(12)

113

101

At 29 February 2016

 

62

169

Recognised in income statement

 

(30)

64

34

Recognised in other comprehensive income

 

-

545

545

At 31 August 2016

 

32

778

810

 

 

8              Inventories

 

At 31

August

2016

At 31

August

2015

At 29

February

2016

 

£000

£000

£000

Finished goods

25,025

19,147

18,669

The value of inventories included within cost of sales for the period was £56,800,000 (2015: £36,300,000; 2016: £82,187,000). The impairment provision was increased by £50,000 to £605,000 (2015: reduction of £55,000; 2016: increase of £296,000) and charged to the statement of comprehensive income.
 

 

9              Trade and other receivables

 

At 31

August

2016

At 31

August

2015

At 29

February

2016

 

£000

£000

£000

Amounts due from related party undertakings

685

42

613

Trade and other receivables

6,923

3,793

4,937

Prepayments and accrued income

4,084

1,697

1,546

 

11,692

5,532

7,096

 

 

10           Trade and other payables

 

At 31

August

2016

At 31

August

2015

At 29

February

2016

 

£000

£000

£000

Trade payables

11,586

16,660

11,255

Amounts owed to related party undertakings

-

20

17

Other payables

1,925

125

175

Accruals and deferred income

24,921

15,079

15,272

Taxes and social security payable

3,074

1,202

3,294

 

41,506

33,086

30,013

 

 

11           Share capital

 

At 31

August

2016 

At 31

August

2015

At 29

February

2016

 

£000

£000

£000

Authorised and fully paid

 

 

 

1,123,267,330 (2015: 1,123,132,260; 2016: 1,123,267,330) Ordinary shares of 1p each

11,233

11,231

11,233

 

 

12           Related party transactions

 

There were no related party transactions during the six months to 31 August 2016 outside of the normal course of business.

 

 

13           Capital commitments

 

Capital expenditure contracted for at the period end but not incurred amounted to:

 

 

At 31

August

2016 

At 31

August

2015

At 29

February

2016

 

£000

£000

£000

Property, plant and equipment

-

2,988

-

 

 

 

 

Appendix to interim announcement - prior period revenues by region

 

Revenue by period for the six months ended 31 August 2016

 

£'000s

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%

 

 

 

Revenue by period for the year to 29 February 2016

 

£'000s

3m to 31 May

3m to 31 August

6m to 31 August

 

FY16

FY15

yoy %

yoy % CER

FY16

FY15

yoy %

yoy %

CER

FY16

FY15

yoy %

 

yoy %

CER

Total

41,322

30,659

35%

37%

49,462

36,538

35%

40%

90,784

67,197

35%

39%

 

 

 

 

 

 

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 UK

26,273

20,686

27%

27%

32,855

24,919

32%

32%

59,128

45,605

30%

30%

 ROE

4,943

3,891

27%

45%

5,460

4,828

13%

26%

10,403

8,719

19%

34%

 USA

3,815

1,485

157%

143%

4,086

1,382

196%

181%

7,901

2,867

176%

161%

 ROW

6,291

4,597

37%

48%

7,061

5,409

31%

55%

13,352

10,006

33%

52%

 

£'000s

4m to 31 December

2m to 29 February

12m to 29 February

 

FY16

FY15

yoy %

yoy % CER

FY16

FY15

yoy %

yoy %

CER

FY16

FY15

yoy %

 

yoy %

CER

Total

73,692

50,793

45%

49%

30,918

21,861

41%

40%

195,394

139,851

40%

42%

 

 

 

 

 

 

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 UK

49,701

34,179

45%

45%

21,267

14,558

46%

46%

130,096

94,342

38%

38%

 ROE

8,588

6,464

33%

44%

3,639

2,903

25%

20%

22,630

18,086

25%

35%

 USA

5,962

2,639

126%

116%

2,659

1,504

77%

63%

16,523

7,009

136%

123%

 ROW

9,441

7,511

26%

41%

3,353

2,895

16%

17%

26,145

20,414

28%

42%

 

 

 

 

 

CER in this appendix for the year ended 29 February 2016 is calculated using exchange rates prevailing during the year ending 29 February 2016.

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

 

 

PRESS RELEASE

This announcement contains inside information.

 

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.

 

PRESENTATION

 

Certain statements included or incorporate by reference within this presentation may constitute "forward-looking statements" in respect of the Group's operations, performance, prospects and/or financial condition.

 

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 presentation should be construed as a profit forecast.

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

 


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