Boohoo still accelerating, UK, Europe and US all growing fast
today Sep 25, 2019
Boohoo’s results statements are always a revelation, if only to see by just how big a margin the group is smashing the market, and Wednesday’s half-year report was no different. The six months to the end of August were yet another triumph.
It saw revenue up 43% to £564.9m, gross profit up 40% to £306.5m, adjusted EBITDA up 53% to £60.7m, and pre-tax profit up an astonishing 83% to £45.2m. The only negative really was the margin, down 100bps at 54.3%
OK, those are the fairly dry figures, but what did all that mean in the real world? Well, for a start, the company seems to be doing well in all of its markets. Its UK revenues rose as much as 35% and international revenues by 55%, that latter figure being key as international sales now account for 44% of its total, up from 41%.
And the company has plenty of cash on hand with which to invest in expanding existing brands or buying new ones – it said it had more than £207m in net cash at the end of the period, even after it's recent purchases of MissPap, Karen Millen and Coast.
Looking at individual brands, the company said Boohoo saw revenue rising 34% to £91m with market share gains in all focus markets, a gross margin up 20bps to 53.6% and 8.4m active customers, a 20% increase.
Growth in the UK continued and international growth has remained “exceptionally strong”, especially in the US and northern Europe. This was helped by the addition of BoohooMan, which continues to thrive, as well as more comprehensive sizing, an extended beauty range, and a commitment to getting trends online fast.
PrettyLittleThing grew even faster with revenue up 41% to £237.6m, although the gross margin at 55.3%, was down 200 bps. The company is clearly prepared to sacrifice some profit in order to gain share and said it saw “outstanding market share and revenue growth in all markets, with 43% more active customers at 5.7m. The US and French markets performed “exceptionally well”.
It was helped by the expansion of the product range with further strong growth in the "shape" ranges including Petite, Curve and Plus. It also continued to expand its accessories and beauty offer, partnering with major beauty brands, and made the most of celebrity connections via a second collaboration with Ashley Graham and a swimwear collaboration with R&B artist Ashanti.
Meanwhile, Nasty Gal revenue rose 148% to £43.9m, but the gross margin at 54.2%, was down 480bps, “driven by refinements to the customer proposition”. It had 1.5m active customers, up 112%, and saw strong revenue growth across all markets.
Revenue growth in its biggest market, the US, continued “at a significant pace,” while “UK and International growth has been exceptional”.
MORE OF THE SAME AHEAD
CEO John Lyttle called the first half of the year “fantastic” and pointed out how, for the first time in the company’s history, it has exceeded £1bn in revenue in the last 12 months.
The company has already announced that it expects full-year group revenues to rise between 33% and 38%, but with the adjusted EBITDA margin for the financial year to remain at around 10%, due to investments in its recently acquired brands.
It had little to say about its acquired brands as they’re still at an early stage but we did hear that “revenue from MissPap is starting to grow rapidly since go-live in April.” Meanwhile Karen Millen and Coast will start trading online in October via Bohoo Group’s own platform.
“Continuous improvement in the customer proposition is a top priority, with new apps, additional payment methods and improved delivery being deployed to ensure we keep pace with technological developments and remain best-in-class,” the company added.
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