Good morning!

It's election day today, so you can sprinkle some spread bets on the parliamentary outcome along with your share trades if you're that way inclined (I'm not!)

Instead, I'll carry on looking at individual company results. There tends to be a bit more volatility around political events, of course, and currency movements in particular can be dramatic. GBPUSD is currently a little over 1.29.

Now, onto a few results:


Boohoo.Com (LON:BOO)

  • Share price: 241p (+9%)
  • No. of shares: 1148 million (after Placing)
  • Market Cap: £2,766 million

Successful £50 million Fundraise & 36.6m Share Placing

Trading Update

Not a small-cap, but much-loved on these pages, I have to mention the latest Boohoo news.

The rationale for raising £50 million is as follows:

As disclosed in the trading statement released yesterday, the growth rates of the Group's brands are accelerating the need for more warehouse capacity. Consequently, the Group announced yesterday plans to construct a new automated super-site of c.600,000 sq ft, which is intended to provide boohoo with over £2 billion of net sales capacity, in addition to the estimated £1 billion net sales being provided by the extended Burnley site.  The land acquisition of the new site, together with the construction, is expected to cost c.£150 million over three years to FY20.   
To enable the Group to be able to maintain a strong cash position that will enable it to take advantage of investment opportunities as they arise, approximately £50 million will be raised through the Placing of New Ordinary Shares and the Group's cash generation will fund the Group's capital expenditure requirements.

That's a fairly straightforward and reasonable explanation, and the dilution caused is minimal. The share count increases by only about 2%, which most people wouldn't consider to be material.

In addition, the Concert Party (family of the co-CEO) are selling £80 million of stock. But they still hold stock which is worth £975 million at the Placing Price, and have agreed to a 6-month lock-in.

So usually dilution and insiders selling out are big warning signs, but if the dilution is small and with a good reason, and if the insiders still retain a large stake, then we can look at it more favourably.

Now onto the trading update:

·     Revenue £120.1 million, up 106% (2016: £58.2 million)
·    …

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