Small Cap Value Report (26 April 2017) - BOO

Good morning!

Coverage might be a little bit limited today but we'll see how it goes.

First up, I will mention the boohoo results:

Boohoo.Com (LON:BOO)

Share price: 184p (-3%)
No. shares: 1123.3m
Market cap: £2,067m

Final Results

Gross profits are up 42%, growing at a lower rate than the 51% revenue increase:

• Revenue £294.6 million (2016: £195.4 million)
• Gross margin 54.6% (2016: 57.8%)

Profit before tax increases to £30.9 million (from £15.7 million).

The contribution from PrettyLittleThing begins from the start of January (until the February year-end).

Outlook:

The outlook comments remain positive:

Trading in the first few weeks of the 2018 financial year has made a promising start and we are excited about the prospects of our development into a multi-branded business. We expect group revenue growth approaching 50%⁽¹⁾ over 2017, which includes growth from the recent acquisitions,  and a group EBITDA margin of approximately 10%."

The main boohoo brand is expected to grow revenue at a rate of 25%, with the rest of the growth coming from the acquisitions of PrettyLittleThing (which is expected to have an organic growth rate of 35%) and Nasty Gal.

So the expected organic growth rate across the group sounds a lot closer to 25% than the 50% total sales growth anticipated.

(work-in-progress)