Small Cap Value Report (6 May 2015) - BOO

Wednesday, May 06 2015 by
27

Good morning!

It's quiet again for company results today - I must make a note to take this week as holiday next year.

Today's report will be a little later than usual, as I'm heading into the City for the analyst presentation for Boohoo.Com (LON:BOO) which is one of my favourite stocks at the moment. I'd better get my skates on, as it starts at 9am.


Boohoo.Com (LON:BOO)

Share price: 27.38p (down 2% today)
No. shares: 1,123.1m
Market Cap: £307.5m

(at the time of writing, I hold shares in this company)

Preliminary results - for the year ended 28 Feb 2015 are out this morning. I've just got back from the analyst presentation, which was well attended - about 40-50 analysts there at a guess, so the company is certainly getting noticed. I asked an adviser whether the overhang from disappointed IPO buyers (who overpaid, at the 50p IPO price) has now cleared, and was told that they believe so - i.e. people who want to sell are now gone.

I'll spend a bit more time on this company, as it's one of my favourite growth companies at the moment, and is the only online etailer I can find which is strongly profitable, growing at a decent pace organically, has global reach, yet is still reasonably priced (house broker Zeus have it on a cash adjusted PER of 20.7 times their current year forecasts).

Here is the highlights table from today's results. I've highlighted the items that are most important, in my opinion;

5549e6e6187a1Boo_table.PNG

First thing to note is the strong top line growth, up 27% as reported in sterling, but up 31% in constant currency. BOO sales are strongest in the UK, at 67% of total turnover. Its other most important markets are Australia, France, and USA. The company sells into most countries in the world, but has decided to focus its efforts on the countries where it sees most potential. As the CFO jokingly commented,

"Mahmud's (the founder, who is known for his colourful language!) new F-word is 'focus'".

Mahmud only spoke once, and spent the whole meeting fiddling with his phone & looking preoccupied/bored, whilst Neil Catto (CFO) and Carol Kane (joint CEO) gave presentations & fielded questions.

Expectations at the time of the IPO last year were far too high, and the business had a slowdown in…

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boohoo.com plc is an online fashion retail group. The Company is based in the United Kingdom and has a strong presence in the United Kingdom, the United States, Europe and Australia, selling products to almost every country in the world. The Company owns the boohoo, boohooMAN, PrettyLittleThing and Nasty Gal brands. These brands design, source, market and sell clothing, shoes, accessories and beauty products targeted at 16-30 year old consumers in the United Kingdom and internationally. more »

LSE Price
187.25p
Change
3.2%
Mkt Cap (£m)
2,152
P/E (fwd)
52.4
Yield (fwd)
n/a



  Is Boohoo.Com fundamentally strong or weak? Find out More »


27 Comments on this Article show/hide all

imranawan 6th May '15 1 of 27
3

Hi Paul

Thanks for the comprehensive write up about Boohoo.Com (LON:BOO). One thing I noticed from the FY results was that menswear had experienced growth of 39% in the last financial year, but still only represented 4.2% of sales. They allude to to this being a significant growth opportunity going forward. Did they elaborate on this at the presentation?

Best wishes,
Imran.

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FREng 6th May '15 2 of 27

Paul

Do you have any concerns about the high Montier C Score for Boohoo.Com (LON:BOO) ? Does it highlight any red flags for you?

FREng

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herbie47 6th May '15 3 of 27

Hi Paul,
Thanks for the detailed report on Boohoo, its one Im considering.

As you seem to have some time, GMAA results are out today, don't look too bad?

Also I would be interested in your views on Pure Wafer sp.

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Sully8786 6th May '15 4 of 27
1

Hi Paul...and anyone else interested in Finsbury Food (LON:FIF) - they made an interesting sounding acquisition today. Any thoughts?

Regards,

Sully.

Company: Dave Sullivan - Talking Stocks
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Glaws2 6th May '15 5 of 27

Paul - thanks for the very comprehensive review of Boohoo results and meeting. It's a shame that more PIs can't get access to the analyst meetings.

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janebolacha 6th May '15 6 of 27

Paul, any thoughts on Gulf Marine Services (LON:GMS), please?
Many thanks,
Jane.

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Paul Scott 6th May '15 7 of 27
2

In reply to imranawan, post #1

Hi Imran,

Yes, menswear was mentioned. Carol Kane mentioned that a blogger that Boohoo.Com (LON:BOO) works with, called Marzia Pie, has a boyfriend called Pudding Pie(??) or something similar. So they've got him wearing BooHoo gear, and that's helping to boost menswear sales.

The Vloggers are the stars of today. It's amazing - the top Vloggers, e.g. Zoella, have more followers than the big fashion magazines, and are incredibly influential - e.g. we heard today how when a new Zoella video went live, featuring BooHoo items, it lifted BooHoo significantly up the Hitwise rankings, in just 4 hours!

Regards, Paul.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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