REG - boohoo.com plc - Interim Results <Origin Href="QuoteRef">BOOH.L</Origin> - Part 1
RNS Number : 1782Uboohoo.com plc14 October 2014For Immediate Release 14 October 2014
boohoo.com plc - Interim results for the six months to 31 August 2014
"The Global Fashion Leader for a Social Generation"
000
6 months ended 31 August 2014
6 months ended 31 August 2013
Change
Revenue
67,197
51,431
31%
Gross profit
41,843
29,588
41%
Gross margin
62.3%
57.5%
480bps
Operating profit
4,326
3,737
16%
EBITDA (adjusted)(2)
6,794
4,179
63%
Profit before tax
4,500
3,673
23%
pro forma(1)
Gross profit
41,843
33,484
25%
Gross margin
62.3%
65.1%
(280)bps
EBITDA (adjusted)(2)
6,794
7,884
(14)%
(1): Adjustment to 31 August 2013 to reflect direct sourcing by boohoo.com plc, not via (now discontinued) related party companies;
(2): EBITDA (adjusted) is pre exceptional costs of 1.2m and share based payment costs of 0.4m
Highlights for the six months to 31 August 2014
Revenue up 31% (36% CER(3))
o UK up 47%, rest of Europe up 43% (51% CER), rest of world down 11% (up 1% CER)
o Rest of Europe and rest of world revenue represents 32% of total revenue
Gross margin 62.3%, up 480bps
EBITDA (adjusted) 6.8m, reflecting investment in overhead to support future growth
Acceleration of growth in Q2 and trading in line with expectations for the full year
2.7m active customers(4), up 33% on prior year
New responsive website improving mobile offering (57% of sessions)
International growth accelerated through roll-out of foreign language websites including Spain, Germany and most recently Italy
Investment in warehouse increasing sq. ft. capacity by 33%
Successful implementation of new warehouse management system
Strong balance sheet with net cash of 56m
(3): CER designates Constant Exchange Rate translation of foreign currency revenue
(4): Active customers defined as having shopped in the last year
Mahmud Kamani and Carol Kane, joint CEOs, commented:
"We are delighted with the results achieved during our first six months as a public company. We have grown revenues whilst continuing to lay the foundations for future growth.
Since our IPO we have invested in the business significantly. Developments include the completed new mezzanine floor in the Burnley warehouse, a new warehouse management system and opening foreign language sites in Spain, Germany and most recently Italy as well as the launch of a fully responsive site to improve our mobile offering.
Our focus remains on further expanding our international footprint while growing sales in the UK. During the current quarter we have managed our marketing spend and growth during the implementation of the warehouse management system and the launch of the fully responsive mobile website. Following the successful execution of these key initiatives, our marketing spend has again increased in line with our targets and we continue to trade in line with market expectations for the full year."
Investor and Analyst Meeting
A meeting for analysts will be held at the office of Buchanan, 107 Cheapside, London, EC2V 6DN on 14 October 2014 commencing at 9.30am. boohoo.com plc's Interim Results 2014 are available at www.boohooplc.com.
For further information:
boohoo.com plc
Mahmud Kamani, Joint Chief Executive
Carol Kane, Joint Chief Executive
Neil Catto, Chief Financial Officer
Benjamin Robertson, Investor Relations
c/o Buchanan Tel: +44 (0)20 7466 5000
ben.robertson@boohoo.com
Tel: +44 77 6851 1056
Buchanan - Financial PR adviser
Richard Oldworth
Helen Chan
Gabriella Clinkard
Tel: +44 (0)20 7466 5000
boohoo@buchanan.uk.com
Zeus Capital - Nominated adviser and broker
Nick Cowles
Andrew Jones
John Goold
Tel: +44 (0)161 831 1512
Tel: +44 (0)20 7533 7727
About boohoo.com
"24/7 Global Fashion"
Keeping one step ahead of the trends or making a subtle style change is easy with boohoo.com and with up to 100 pieces hitting the site every day and a new collection each week, boohoo.com never stops - it's 24/7 fashion at its best.
From the UK's best kept fashion secret to one of the fastest growing own brand, international e-tailers, boohoo.com has quickly evolved into a global fashion leader of its generation. Combining cutting-edge, aspirational design with an affordable price tag, boohoo.com has been pushing boundaries since 2006 to bring its customers all the latest looks for less.
www.boohoo.com
www.boohoo.com/newz
fr.boohoo.com
www.boohoo.com/europe
www.boohoo.com/sweden
de.boohoo.com
www.boohoo.com/usa
www.boohoo.com/denmark
it.boohoo.com
www.boohoo.com/canada
www.boohoo.com/norway
nl.boohoo.com
www.boohoo.com/aus
es.boohoo.com
Financial highlights
6 months to 31 August 2014
6 months to 31 August 2013
Change
000
000
Revenue
67,197
51,431
+31%
Gross profit
41,843
29,588
+41%
Gross margin
62.3%
57.5%
+480bps
EBITDA (adjusted)
6,794
4,179
+63%
Profit before tax and exceptional items
5,727
3,733
+53%
Profit before tax
4,500
3,673
+23%
Pro forma gross profit
41,843
33,484
+25%
Pro forma gross margin
62.3%
65.1%
-280bps
Pro forma EBITDA (adjusted)
6,794
7,884
-14%
Cash at period end
55,817
5,318
+950%
Earnings per share
0.29p
0.25p
+18%
Prior year pro forma numbers include the net profit that was made by related party companies supplying inventory to boohoo.com. Since Q4 2013, this profit is wholly realised by boohoo.com, which now sources all product directly and not through related parties.
EBITDA (adjusted) is calculated as profit before tax, interest, depreciation and amortisation, share based payment charges and exceptional costs.
Business review
Performance during the six months to 31 August 2014
We achieved revenue of 67m, up 31% (36% CER) for the six months ended 31 August 2014. Our largest market continues to be the UK, where revenue for the six months grew by 47%. Revenue in the rest of Europe grew by 43% (51% CER), supported by the launch of new foreign language websites in Spain and Germany. A slowdown in the rest of the world of 11% was driven by currency headwinds and, on a constant currency basis, rest of the world grew by 1% over the period. In the second quarter, revenue growth accelerated to 37% (41% CER), with the UK up 50%, rest of Europe up 50% (61% CER) and rest of world stable (up 8% CER). This compares to first quarter growth of 24% (28% CER). Adjusted EBITDA was 6.8m for the period, reflecting significant investment in overhead to support future growth.
Fashion
Our constantly expanding product range and rapid reaction to fashion trends has underpinned the successful growth of new product categories. We launch up to 100 new styles every day, offering our customers the very latest fashions and trends from a range of over 9,000 styles. The combination of high fashion, great value prices and effective marketing encourages customers to shop on every occasion on a regular basis.
Sales of women's tops have grown by 63% and now represent 15% of sales, our second largest category after dresses, which account for 34% of total sales. Fashion playsuits and jumpsuits have been very popular and by identifying and targeting the trend with a great product offering and marketing support, we have achieved sales growth of 188% in that category. Other popular categories which have grown well include jackets and coats, with sales increasing by 59%, jeans up by 46% and footwear up by 39%. We are becoming a recognised destination for swimwear, which has continued to out-perform, with sales growth of 107%. The Boutique collection, a higher price point offering of ladies wear, grew by 74%. Our menswear line, first introduced in autumn 2013, grew by 46% and represents 3.6% of total sales and has significant opportunity for future growth.
Our women's plus size range, boohoo plus, has performed very well, with first half sales of 1.3m, growing strongly month on month, and represents the great potential of this market globally. We were voted "Best for Curves" in Cosmopolitan Magazine's fashion awards this September. This autumn, we will be launching a petite range and boohoo fit, adding to our expanded ranges which include boohoo man, boohoo nights and boohoo edit.
Our autumn/winter collection has received excellent reviews from the fashion press following the launch in mid-September and continues to offer great fashion at affordable prices from diverse collections, building on the successes of the first half.
Marketing
Over the summer, our marketing campaign "#experienceeverything" was highly successful, driving sales growth and new customer acquisition. The messaging was delivered through TV advertising across our key markets, as well as above the line advertising on the underground, digital display, banners and video, blogger outreach, and direct mail.
This autumn we launched our campaign "#wherewestand" on social media, which we expect to be highly engaging for our young customers. The campaign has a strong music element which will be shown on TV, and the adverts in London Underground and fashion magazines. The advert went into the UK top 10 adverts on Shazam within the first week of launch. We have developed a number of associations with music artists, which are highly complementary to the interests of many of our target consumers. Such associations enable us to extend our reach and appeal to a larger audience. Other social media activity includes international blogger, Nadia Aboulhosn, who will be supporting our plus size range with live tweets in the autumn.
International marketing activity in the second half will include TV advertising in Scandinavia, Germany, Netherlands and Italy. In the USA, a "pop-up shop" in New York will support a series of promotional events, including a student ambassador programme and college fashion weeks in several states. In Australia, the summer campaign will include outdoor advertising, blogger outreach, on-line activity and TV advertising.
Marketing expenditure was 14.5% of revenue in the first half this year compared to 13.8% in the first half of last year. This year, marketing expenditure in our rapidly expanding European markets in start-up phase drove the increase over the previous half year.
Customer interaction
We served 2.7 million customers in the 12 months to 31 August 2014, up from 2.0 million in the 12 months to 31 August 2013. The boohoo.com websites registered 145 million sessions in the 12 months to 31 August 2014, up 36% on the previous 12 months. On social media, we have 0.4 million followers on both Twitter and Instagram, 2.9 million Facebook fans and 1.4 million views recorded on YouTube. We have recently launched our platforms on up and coming social media sites Snapchat and Tunepics and we also feature on Pinterest.
We take great pride in our customer service and measure continuously our response times to ensure we attain the highest standards. We monitor reviews on external customer review sites and in September 2014 our Trustpilot rating from over a 100,000 reviews was 4 star, which is best in class. Our multi-lingual advisers respond to emails in foreign languages to service our French, German and Spanish websites.
We fulfilled 2.7 million orders in the first half, up 40% on the same period last year, and despatched 7.2 million units, up 53%, from our wide range of products. We are deploying the very latest technology to modify the website content for selected customer groups and to monitor the effectiveness of different presentations of the website, so we can quickly improve customer engagement and conversion. This same technology also allows us to personalise the website to the customer's gender and shopping preferences.
The new warehouse management system now in operation will enable us to move from an 8pm to a 9pm cut-off for next day delivery and an increasing number of Sunday deliveries will be available in autumn. Customer communication of shipping progress is now active via email updates. Delivery times to European countries have been reduced and local returns centres have been created to consolidate returns and reduce the cost. Future plans include alternative collection and return points (e.g. collect+) and text messaging to enable delivery point and time to be amended by the customer during transit.
Technology
We added Spanish and German language websites on our in-house developed platform in May and July respectively, following on from the French language website launched in November 2013. Monthly sales in France and Germany have increased by over 250%. The pricing strategy in Spain is being revised to improve momentum in that market. An Italian language website was launched on the same in-house platform shortly after the period end on 12 September 2014.
Scandinavian currency payment options were added in June 2014 and we have seen a significant increase in conversion rate and sales in the region. In September 2014, we added the Ideal payment option for our Dutch customers and launched a website in English to tailor product and marketing offerings to the Netherlands.
The main website was refreshed in June with a white design, which has been well received by customers. A responsive (meaning the display will automatically adjust to the screen size of the device used) mobile website went live in September 2014, greatly improving the customer experience, with 57% of sessions now executed using mobile and tablet devices.
We utilise two different website platforms, one being externally developed and managed and the other internally. This strategy provides security and flexibility, enabling us to deliver local look, language, feel and pricing to international sites in a relatively short timescale.
International expansion
International sales grew by 5% (16% CER) compared to the first half of last year. Our strategy in providing foreign language sites, multiple payment methods, currency options and locally optimised marketing strategies continues to drive growth.
In the rest of Europe, we saw a continued acceleration in growth through the first half with second quarter growth of 50% (61% CER) up on first quarter growth of 36% (41% CER). We are particularly pleased with the performance in France which has seen revenues grow in excess of 250% over the period. The recently launched German language site has driven a tripling of daily sales and revenue is building, although from a much smaller base.
In Australia, which has suffered from adverse currency movements, we have appointed a country marketing manager and reduced prices whilst maintaining gross margins in excess of 60%. We have seen a return to year on year growth on a sterling and local currency basis in the latter part of the first half. The number of internet sessions in Australia has increased by 45% in the first half, seeing boohoo.com move up several places in internet rankings to number 5 on Hitwise. We are launching a new collection for the Australian market called the edit.
The US market continued to grow modestly. Our strategy is to concentrate marketing in the New York district and drive demand through highly visible and effective marketing campaigns and word of mouth recommendations by building on our strategic influencer relationships. We anticipate this will drive awareness across city boundaries, due to the influence of the region on the fashion buying US public.
Warehouse
Our warehouse investment programme is on track, with the completed construction of mezzanine floors within the existing warehouse increasing capacity by 56,000 sq. ft.. Work has commenced on the building of a 7m extension to the existing warehouse and is scheduled for completion in spring 2015, giving us extra capacity to support up to 500m of gross sales. The 110,000 sq. ft. extension will have multiple floors and will add 670,000 sq. ft. of storage space, enough to store 8 million units, compared to the current 2.7 million unit capacity.
The new 1.5m warehouse management system went live successfully in early September. The system will improve efficiency through optimisation of the pickers' routes using Wi-Fi arm mounted units, improving order management, fulfilment accuracy and stock control.
We have converted a large number of warehouse operatives' contracts from agency to permanent and revised our pay structure to attract and retain capable and experienced workers to meet the demands of our expanding business. Agency staff are engaged to support the operation in peak periods, optimising the efficient use of labour resources.
People
Our talented management team has been augmented by the appointments of a HR director and a marketing director. We have also continued to build our e-commerce, marketing and IT functions with new starters to provide the resource for our international expansion programme, with focus on marketing and improving our knowledge of country-specific consumer and competition insight. Our customer service team has grown with the addition of multi-lingual advisors to service our foreign language websites. Office headcount has increased by 101 and warehouse headcount by 174 through new recruits and agency workers converted to permanent contracts. We now employ a total of 752 people.
Financial review
The first half has delivered overall revenue growth and profits in line with our budget and expectations.
Sales revenue by geographical market
6 months to 31 August 2014
6 months to 31 August 2013
Change
Change
000
000
CER
UK
45,605
30,931
+47%
+47%
Rest of Europe
8,719
6,081
+43%
+51%
Rest of world
12,873
14,419
-11%
+1%
67,197
51,431
+31%
+36%
At constant exchange rates [CER], all regions showed growth compared with the same period last year. Growth in sterling terms has been impacted by currency headwinds across our international business, especially in Australia. In the latter part of the second quarter, Australia sales in sterling and on a local currency basis, returned to growth following the revised pricing strategy.
KPIs
6 months to 31 August 2014
6 months to 31 August 2013
Change
Active customers(1)
2.7 million
2.0 million
+32.7%
Number of orders
2.7 million
1.9 million
+39.7%
Conversion rate to sale (2)
3.5%
3.3%
+20bps
Average order value(3)
36.90
37.56
-1.8%
Number of items per basket
2.68
2.45
+9.4%
(1) Defined as having shopped in the past year
(2) Defined as the percentage of orders taken to internet sessions
(3) Calculated as gross sales including sales tax divided by the number of orders
Our business is continuing to attract new customers and retain existing customers, with active customer numbers increasing by 32.7% compared to a twelve month period one year ago. Conversion rates have increased to 3.5%. Average order value has seen a small decline of 1.8% to 36.90 as we have sought to keep our prices highly competitive and target product at price points most appealing to our young customers, which has also underpinned the growth in the number of items per basket increasing 9.4%
Consolidated income statement
Actual
Pro forma
6 months to 31 August 2014
6 months to 31 August 2013
Change
6 months to 31 August 2013
Change
000
000
000
Revenue
67,197
51,431
31%
51,431
31%
Cost of sales
(25,354)
(21,843)
16%
(17,947)
41%
Gross profit
41,843
29,588
41%
33,484
25%
Gross margin
62.3%
57.5%
65.1%
Distribution costs
(14,618)
(10,755)
(10,755)
Administrative expenses
(22,899)
(15,096)
(15,287)
Operating profit
4,326
3,737
16%
7,442
-42%
Finance income/(expense)
174
(64)
(64)
Profit before tax
4,500
3,673
23%
7,378
-39%
Calculation of EBITDA (adjusted)
Operating profit
4,326
3,737
7,442
Depreciation and amortisation
824
382
382
Share-based payments
417
-
-
Exceptional items
1,227
60
60
EBITDA (adjusted)
6,794
4,179
63%
7,884
-14%
In the table above, the pro forma results last year add to the reported results the profits that were made by related companies in supplying inventory to boohoo.com. From late 2013, boohoo.com sourced all its products direct from suppliers and not through related companies. The cost of personnel performing the sourcing activity in the related companies has also been added to the prior period reported figures to reflect the subsequent transfer of these employees to boohoo.com.
Reported gross margin rose from 57.5% to 62.3% due to direct sourcing of inventory from suppliers compared to the first half last year [H1], when a proportion of inventory came from related parties. The pro forma margin of 65.1% in H1 last year was higher than the margin of 62.3% this year because of a combination of factors, with roughly equal weighting: the increase this year in the proportion of UK sales, where margin is lower than in the international markets; adverse currency movements in international sales; and a small reduction in selling prices in the UK, driving growth and increased profits. In addition, the pro forma margin last year reduced from 65.1% in H1 to 62.8% for the full year, the latter being more comparable with H1 this year.
Distribution costs and administrative expenses have increased due to business expansion, higher marketing expenditure and investment in improved, more efficient systems, and in talented people to support the transition to a public company. Administration costs relating to corporate governance, finance and legal resources associated with the transition to plc amounted to an additional 1.1m of costs over the same period last year.
The exceptional items of 1.2m in H1 this year, included in administrative expenses, relate to IPO expenses. IPO expenses written off to share premium amounted to 12.6m.
EBITDA (adjusted) increased by 63% from 4.2m to 6.8m on an actuals basis and reduced from 7.9m to 6.8m on a pro forma basis.
Statement of financial position
At 31 August 2014
At 28 February 2014
000
000
Intangible assets
3,770
3,052
Property, plant and equipment
7,037
6,199
Deferred tax
121
33
Non-current assets
10,928
9,284
Working capital
(4,798)
(1,147)
Net financial (liabilities)/assets
(56)
101
Cash and cash equivalents
55,817
5,411
Interest bearing loans and borrowings
(99)
(2,742)
Current tax liability
(1,291)
(1,147)
Net assets
60,501
9,760
Net assets have increased by 50.7m, driven by profits and the net IPO proceeds of 47.5m. Working capital has reduced primarily due to increased accruals for unbilled goods and services at the month end with increased trading activity.
Liquidity and financial resources
Free cash flow was 7.0m compared to 1.8m in H1 2013. Working capital requirements decreased: inventories increased due to the requirement to hold more products to serve our growing customer base; receivables decreased with payment of 1.1m related party receivables; and payables and accruals increased in line with trading activity. Capital expenditure was 2.4m as we have continued to invest in our warehouse and IT systems to support projected growth in trade. The net IPO proceeds were 47.5m and the closing cash balance was 55.8m.
Consolidated cash flow statement
6 months to 31 August 2014
6 months to 31 August 2013
000
000
Profit for the period
3,282
2,788
Depreciation charges and amortisation
824
382
Share-based payments charges
417
-
Tax expense
1,218
885
Finance (income)/expense
(174)
64
Increase in inventories
(1,317)
(539)
Decrease/(increase) in trade and other receivables
332
(944)
Increase in trade and other payables
4,793
416
Capital expenditure
(2,380)
(1,233)
Free cash flow
6,995
1,819
Net proceeds raised from IPO
47,515
-
Purchase of own shares by Employee Benefit Trust
(400)
-
Interest received/(paid)
174
(64)
Tax paid
(1,162)
(526)
Non cash charges and exchange differences
(73)
-
Proceeds from new loans
-
2,667
Dividends paid
-
(400)
Repayment of borrowings
(2,643)
(2,785)
Net cash flow
50,406
711
Cash and cash equivalents at beginning of period
5,411
4,607
Cash and cash equivalents at end of period
55,817
5,318
Outlook
Our focus remains on further expanding our international footprint while growing sales in the UK. During the current quarter we have managed our marketing spend and growth during the implementation of the warehouse management system and the launch of the fully responsive mobile website. Following the successful execution of these key initiatives, our marketing spend has again increased in line with our targets and we continue to trade in line with market expectations for the full year.
Mahmud Kamani
Carol Kane
Neil Catto
Joint Chief Executive
Joint Chief Executive
Chief Financial Officer
13 October 2014
Unaudited consolidated statement of comprehensive income
for the 6 months ended 31 August 2014
Note
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February
2014
000
000
000
Revenue
3
67,197
51,431
109,791
Cost of sales
(25,354)
(21,843)
(44,879)
Gross profit
41,843
29,588
64,912
Distribution costs
(14,618)
(10,755)
(24,290)
Administrative expenses
(22,899)
(15,096)
(30,289)
Other income
4
-
-
488
Operating profit
4,326
3,737
10,821
Finance income/(expense)
174
(64)
(84)
Profit before tax
4,500
3,673
10,737
Taxation
(1,218)
(885)
(2,310)
Profit for the period
3,282
2,788
8,427
Other comprehensive income for the period, net of income tax
Net fair value (loss)/gain on cash flow hedges
(73)
-
20
Total comprehensive income for the period
3,209
2,788
8,447
Earnings per share
6
Basic
0.29p
0.25p
0.75p
Diluted
0.29p
0.25p
0.74p
Unaudited consolidated statement of financial position
at 31 August 2014
Note
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Assets
Non-current assets
Intangible assets
3,770
1,128
3,052
Property, plant and equipment
7,037
5,316
6,199
Deferred tax
7
121
33
33
10,928
6,477
9,284
Current assets
Inventories
8
11,112
7,379
9,795
Trade and other receivables
9
3,693
1,817
3,927
Financial assets
27
-
125
Cash and cash equivalents
55,817
5,318
5,411
Total current assets
70,649
14,514
19,258
Total assets
81,577
20,991
28,542
Liabilities
Current liabilities
Trade and other payables
10
(19,603)
(13,162)
(14,869)
Interest bearing loans and borrowings
11
(99)
(207)
(384)
Financial liabilities
(83)
-
(24)
Current tax liability
(1,291)
(1,006)
(1,147)
Total current liabilities
(21,076)
(14,375)
(16,424)
Non-current liabilities
Interest bearing loans and borrowings
11
-
(2,415)
(2,358)
Total liabilities
(21,076)
(16,790)
(18,782)
Net assets
60,501
4,201
9,760
Equity
Share capital
12
11,231
-
-
Share premium
12
551,591
-
-
Capital redemption reserve
100
-
100
Hedging reserve
(53)
-
20
EBT reserve
(429)
-
-
Reconstruction reserve
(515,261)
117
17
Retained earnings
13,322
4,084
9,623
Total equity
60,501
4,201
9,760
Unaudited consolidated Statement of Changes in Equity
for the 6 months ended 31 August 2014
Called up share capital
Share premium
Capital redemption reserve
Hedging reserve
EBT reserve
Recon-struction reserve
Retained earnings
Total
equity
000
000
000
000
000
000
000
000
Balance as at 1 March 2014
-
-
100
20
-
17
9,623
9,760
Issue of shares
11,231
551,591
-
-
(29)
(515,278)
-
47,515
Purchase of shares by EBT
-
-
-
-
(400)
-
-
(400)
Share-based payment charge
-
-
-
-
-
-
417
417
Profit for the period
-
-
-
-
-
-
3,282
3,282
Fair value loss on cash flow hedges
-
-
-
(73)
-
-
-
(73)
Balance at 31 August 2014
11,231
551,591
100
(53)
(429)
(515,261)
13,322
60,501
Called up share capital
Share premium
Capital redemption reserve
Hedging reserve
EBT reserve
Recon-struction reserve
Retained earnings
Total
equity
000
000
000
000
000
000
000
000
Balance as at 1 March 2013
-
-
-
-
-
117
1,696
1,813
Profit for the period
-
-
-
-
-
-
2,788
2,788
Dividends
-
-
-
-
-
-
(400)
(400)
Balance at 31 August 2013
-
-
-
-
-
117
4,084
4,201
Called up share capital
Share premium
Capital redemption reserve
Hedging reserve
EBT reserve
Recon-struction reserve
Retained earnings
Total
equity
000
000
000
000
000
000
000
000
Balance as at 1 March 2013
-
-
-
-
-
117
1,696
1,813
Profit for the period
-
-
-
-
-
-
8,427
8,427
Fair value gains on cash flow hedges
-
-
-
20
-
-
-
20
Redemption of preference shares
-
-
100
-
-
(100)
(100)
(100)
Dividends
-
-
-
-
-
-
(400)
(400)
Balance at 28 February 2014
-
-
100
20
-
17
9,623
9,760
Unaudited consolidated cash flow statement
for the 6 months ended 31 August 2014
Note
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February
2014
000
000
000
Cash flows from operating activities
Profit for the period
3,282
2,788
8,427
Adjustments for:
Depreciation charges and amortisation
824
382
979
Share-based payment charge
417
-
-
Gain on sale of property, plant and equipment
-
-
(60)
Transfer from hedging reserves
(73)
-
20
Finance (income)/expense
(174)
64
84
Tax expense
1,218
885
2,310
Profit before tax before changes in working capital and provisions
5,494
4,119
11,760
Increase in inventories
8
(1,317)
(539)
(2,955)
Decrease/(increase) in trade and other receivables
9
332
(944)
(3,179)
Increase in trade and other payables
10
4,793
416
2,147
Cash generated from operations
9,302
3,052
7,773
Interest paid
174
(64)
(84)
Tax paid
(1,162)
(526)
(1,810)
Net cash inflow from operating activities
8,314
2,462
5,879
Cash flows from investing activities
Acquisition of intangible assets
(1,024)
(621)
(2,762)
Acquisition of tangible property, plant and equipment
(1,356)
(612)
(1,875)
Proceeds from sale of property, plant and equipment
-
-
60
Net cash used in investing activities
(2,380)
(1,233)
(4,577)
Cash flows from financing activities
Proceeds from the issue of ordinary shares
300,000
-
-
Payment of convertible loan notes to shareholders of ABK Limited
(239,899)
-
-
Share issue costs written off to share premium
(12,586)
-
-
Purchase of own shares by EBT
(400)
-
-
Proceeds from new loan
-
2,667
199
Redemption of preference shares
-
-
(100)
Dividends paid
-
(400)
(400)
Repayment of borrowings
(2,643)
(2,785)
(197)
Net cash generated from/(used in) financing activities
44,472
(518)
(498)
Increase in cash and cash equivalents
50,406
711
804
Cash and cash equivalents at beginning of period
5,411
4,607
4,607
Cash and cash equivalents at end of period
55,817
5,318
5,411
Notes
(forming part of the interim report and accounts)
1 Basis of preparation
The interim financial statements for the six months ended 31 August 2014 have been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. The interim financial statements should be read in conjunction with the group's Report and Financial Information for the year ended 28 February 2014. The group's Report and Financial Information, which is not statutory financial statements, was extracted from audited financial statements of the subsidiaries prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. Since the company did not acquire the group until after the balance sheet date, those financial statements include the results of the subsidiaries as if they were always part of the group. boohoo.com plc acquired the group on 14 March 2014 simultaneous with its flotation and admission to the AIM listing of the London Stock Exchange.
The directors have considered the accounting policy that should be applied in respect of the consolidation of the group formed upon acquisition of the group on admission. They have concluded that the transaction described above represented a combination of entities under common control and in accordance with IAS 8 "Accounting policies, changes in accounting estimates and errors" have considered FRS 6 "Acquisitions and mergers" under UK GAAP, which the directors believe reflects the economic substance of the transaction. Under this standard, assets and liabilities are recorded at book value, not fair value, intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented. Therefore, although the group reconstruction did not take place until 14 March 2014, the consolidated financial statements are presented as if the group structure had always been in place, using merger accounting principles.
boohoo.com plc is not required to produce its first annual report and accounts until the year ended 28 February 2015. The interim financial statements contained in this report do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The audited results of the company's subsidiaries for the year ended 28 February 2014 have been filed with the Registrar of Companies. The auditors' reports on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under s498(2) or s498(3) of the Companies Act 2006.
The group's business activities together with the factors that are likely to affect its future developments, performance and position are set out in the Business Review. The Business Review describes the group's financial position, cash flows and borrowing facilities.
The interim financial statements are unaudited and were approved by the board of directors on 13 October 2014.
Going concern
The interim financial statements have been approved on the assumption that the group remains a going concern. The following paragraph summarises the issues and basis on which the directors have reached their conclusion.
The directors have reviewed the group's cash flow forecasts for a period exceeding 12 months from the date of authorisation of these interim financial statements. Following this review, the directors have formed a judgement that, at the time of approval of the interim financial statements, the group has sufficient resources to continue operating for the foreseeable future including the funding of necessary capital expenditure. For the reasons noted above, the directors continue to prepare the financial statements on a going concern basis.
Accounting policies
The interim financial statements have been prepared in accordance with the accounting policies set out in the group's Report and Financial Information for the year ended 28 February 2014, except for the addition of share based payments in accordance with IFRS 2.
Share based payments
The group operates an equity settled share based payment plan. The fair value of the shares is determined using the Black Scholes option pricing model and is expensed in the statement of comprehensive income on a straight-line basis over the vesting period after allowing for an estimate of the number of shares that are expected to vest. The level of vesting is reviewed annually and the expense adjusted to reflect any change in estimates.
2 Principal risks and uncertainties
The board considers the principal risks and uncertainties which could impact the group over the remaining six months of the financial year to 28 February 2015 to be unchanged from those set out in the group's Report and Financial Information for the year ended 28 February 2014, which in summary are: economic risk; competition risk; fashion and consumer demands risk; systems and technical risk; supply chain risk; reputational risk; financial risk; people risk; and loss of key facilities.
These are set out in detail on pages 14 to 15 of the group's Report and Financial Information for the year ended 28 February 2014, a copy of which is available on the group's website, www.boohooplc.com.
3 Revenue
Sales revenue by geographical market
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February 2014
000
000
000
UK
45,605
30,931
70,992
Rest of Europe
8,719
6,081
13,058
Rest of world
12,873
14,419
25,741
67,197
51,431
109,791
4 Other income
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February 2014
000
000
000
Gift to group from director for benefit of employees
-
-
450
Waiver of loan from director in ABK Limited
-
-
38
-
-
488
5 Profit before tax
Profit before tax is stated after charging:
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February 2014
000
000
000
Operating lease rentals for buildings
290
189
401
Depreciation
518
263
643
Amortisation
306
119
336
Share-based payment charge
417
-
-
Exceptional items - IPO costs
1,227
-
-
Exceptional items - capital re-organisation fees
-
60
375
6 Earnings per share
Basic earnings per share is calculated by dividing profit after tax by the weighted average number of shares in issue during the period. Own shares held by the Employee Benefit Trust are eliminated from the weighted average number of shares. The prior year comparatives are stated using the number of shares in issue on the IPO date.
Diluted earnings per share is calculated by dividing the profit after tax by the weighted average number of shares in issue during the period, adjusted for potentially dilutive share options.
6 months to 31 August 2014
6 months to 31 August 2013
Year to
28 February 2014
Weighted average shares in issue for basic earnings per share
1,120,041,882
1,120,210,360
1,120,210,360
Dilutive share options
13,827,152
12,844,000
12,844,000
Weighted average shares in issue for diluted earnings per share
1,133,869,034
1,133,054,360
1,133,054,360
Earnings (000)
3,282
2,788
8,427
Basic earnings per share
0.29p
0.25p
0.75p
Diluted earnings per share
0.29p
0.25p
0.74p
7 Deferred tax
Depreciation in excess of capital allowances
Share-based payments
Total
000
000
000
At 1 March 2013
33
-
33
At 31 August 2013
33
-
33
At 28 February 2014
33
-
33
Recognised in statement of comprehensive income
-
88
88
At 31 August 2014
33
88
121
8 Inventories
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Finished goods
11,112
7,379
9,795
The value of inventories included within cost of sales for the period was 25,354,000 (2013: 21,843,000). An impairment provision of 342,000 (2013: 1,073,000) was charged to the statement of comprehensive income.
9 Trade and other receivables
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Amounts due from related party undertakings
51
548
1,156
Other receivables
2,542
648
1,610
Prepayments and accrued income
1,100
621
1,161
3,693
1,817
3,927
Other receivables represent amounts due from credit card sales which were received within a few days of the invoice date in accordance with normal bank clearance times, advance payments to suppliers and a deposit paid to a credit card organisation.
10 Trade and other payables
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Trade payables
6,315
5,183
8,469
Amounts owed to related party undertakings
-
343
192
Other payables
121
62
42
Accruals and deferred income
10,775
6,605
4,859
Taxes and social security payable
2,392
969
1,307
19,603
13,162
14,869
11 Interest-bearing loans and borrowings
This note provides information about the contractual terms of the group's interest-bearing loans and borrowings, which are measured at amortised cost.
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Non-current liabilities
Secured bank loans
-
2,415
2,358
Current liabilities
Secured bank loans
-
185
185
Other loans
99
22
199
99
207
384
Terms and debt repayment schedule
Currency
Nominal interest rate
Year of
maturity
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Secured bank loan
2.75%
2027
-
2,600
2,543
Other loan
0%
2014
99
22
199
99
2,622
2,742
The secured bank loan was repaid in April 2014.
12 Share capital and share premium
At 31
August
2014
At 31
August
2013
At 28
February
2014
000
000
000
Authorised and fully paid
1,123,132,360 Ordinary shares of 1p each
11,231
-
-
Share premium
551,591
-
-
562,822
-
-
13 Related party transactions
There are no material related party transactions during the six months to 31 August 2014, other than the purchase of 1 million shares for 400,000 by the Employee Benefit Trust for which the cash was provided by the company. Payments received from related party debtors amounted to 1,105,000 and payments made to related party creditors were 192,000, these payments being in respect of balances in existence at 28 February 2014.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIR EAKEDFDFLFFF
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