I know that Boohoo.Com (LON:BOO) is a favourite of many on here and expected there to be a bit more chat on it after Q1 2019 update which I was looking forward to for my own enlightenment.
I sold my Boohoo.Com (LON:BOO) shares on this announcement at 216p. I'd bought in for the first time late 2017 between 170p & 180p. A measly 20% ish gain. No boo multi-bagging glory for me. A really impressive business and I was very late to it compared to many buying in the 50x forward PE area whereas other got in lower price and lower PE.
This is not my usual buy territory as I like a bit more value and/or contrariness to buy candidates (I do like some growth and willing to pay up a bit but I'm defo slightly to the cheap and miserly side). Just the way I'm wired. I can irritate myself sometimes with a lack of willingness to pay too much for growth. Boo had pulled back on some worries after a stellar FY2017 and I felt an opp to get into a stellar grower at a high but not too high price.
FY 2018 performance was very impressive particularly top line growth at 97%. Conversion to profits less impressive at 29% net profit and 26% eps. This is where the trouble starts for me...
I was willing to overlook last year's lack of follow through to profits with new acquisitions, the cost of rapid growth and infrastructure build out. However, Pretty Little Thing acquisition had irritated me a little as 1/3rd of value stays with founders (siblings of boo founder). Obvs PLT has made stellar first year contribution and spectacular Q1 2019, BUT...
The main brand stagnated a bit by comparison in FY 2018 relative to PLT but not absolute terms where it was still smoking relative to competition so that was okay overall. However, the Q1 boo brand result is a flop. IMO there is a lot to understand about this flop relative to PLT and we don't really at the moment.
Boohoo man was pushed at end of financial year as standalone brand but they have not split it out in Q1. That seems a bit odd to me.…
I can’t see Amazon wanting to acquire them with their Leicester supply chain, at least not if their due diligence extended to reading the recent FT investigation into the textile industry there.
https://www.ft.com/content/e427327e-5892-11e8-b8b2-d6ceb45fa9d0
