- New group CEO appointed 1 November 2024
- Recovery plan outlined in March this year
- Adjusted EBITDA up 3% to £41.6 million
Analysts at Panmure Liberum are upbeat about British online fast-fashion retail group Boohoo (DEBS) (currently rebranding as Debenhams Group) which reported a 3% rise in adjusted EBITDA (earnings before interest taxation depreciation and amortisation) for the year ending 28 February yesterday afternoon.
On Wednesday the shares gained nearly 3% to 14.94p in mid-morning trading.
The results showed a ‘standout’ performance for the Debenhams brand, according to Dan Finley, group CEO, growing GMV (gross merchandise value) to £654 million, up 34% year-on-year with adjusted EBITDA of £25 million, up £14 million year-on-year.
Distribution costs decreased by 46% versus full year 2024 driven by annualised efficiencies from automation investments at Sheffield warehouse, the closure of the Daventry warehouse and lower volumes.
WHAT DID THE CEO SAY?
Dan Finley, group CEO said: ‘The Debenhams capital-light, stock-light, cost-light, cash-generative marketplace model sits at the heart of our new strategy. The multi-year turnaround of Debenhams is the blueprint for the turnaround of the wider group.
‘We have significantly reduced the capital intensity of the business. We have faced into legacy stock issues and reduced our stock holding by more than 50%. We have stopped unnecessary capital expenditure and reduced capex by more than 50%. Further reductions will be delivered this financial year.’
NEW DIRECTION
Analysts at Panmure Liberum observed: ‘Results for the year ending February 2025 signal change. A new C-suite and strategy has led to significant exceptional costs. It is rare on the public markets that such decisive actions are taken but there is a plan and the funding to execute this plan (with refinancing recently concluded).
‘The plan is to create a stock light, capital light marketplace across all areas of the group and deliver a sustainable growth model. While noise in the financials will continue in full year 2026, guidance is for EBITDA progress and the first half of full year 2026 has gotten off to a solid start.
‘The proposed sale of PLT (PrettyLittleThing) should further clarify the direction of travel and the significantly reduced net debt shows that cash is the key focus with capex, inventory, and working capital all materially down year-on-year.’
