Good morning.

I'm still in Warsaw, so am slightly detached from all the market goings-on. It seems as if the resources sector is in complete chaos - with an analyst questioning whether Glencore (LON:GLEN) is even viable at all now. I looked at Lonmin (LON:LMI) a little while ago, and came to a similar conclusion - the debt appears enough to engulf the company, if banks get cold feet. Cash is king in tough times.


Boohoo.Com (LON:BOO)

Share price: 34.38p
No. shares: 1,123.1m
Market cap: £386.1m

(at the time of writing, I hold a long position in this share)

Interim results to 31 Aug 2015 - headline figures look excellent - remember that this growth is all organic, making it all the more impressive;

560a63cf7f73bScreenshot_2015-09-29_at_12

Note that the profit comparisons are flattered by inclusion of the IPO costs last year. A table itemises this, and shows that the +12% EBITDA performance is probably the best year-on-year performance comparison:

560a64ee86debScreenshot_2015-09-29_at_12

Growth strategy - as explained at the last analyst meeting, BooHoo management recognised that demand is elastic - i.e. very sensitive to price reductions, so they made a deliberate decision (which is absolutely correct in my view) to aggressively grow sales by offering keener pricing, and frequent customer deals on next day delivery.

I think this is a far better strategy than trying to maximise short term profit margins - after all, BOO doesn't actually need to make any profit particularly in the short term, as it's already swimming in cash, and doesn't yet pay divis. So why not go for growth, and become the dominant player in its niche, of fast fashion for pocket money, mainly for the 16-24 female market.

International growth - the core UK market is growing strongly still, which I'm encouraged at. The growth rate actually accelerated in the UK from 27% to 32% - really good news.

Rest of Europe was the softest region, slowing from +45% in Q1 to +26% in Q2 (at constant currency), which also faced a currency headwind, reducing +26% to a reported +13% in sterling. These are still very impressive numbers compared with most businesses though - how many other UK companies are reporting organic growth of this magnitude? Very few.

Rest of World is the stand-out…

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