REG - boohoo group plc - Correction: Interim Results
27/09/2018 18:20
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RNS Number : 2457C
boohoo group plc
27 September 2018
For Immediate Release
27 September 2018
The information contained within this announcement is deemed by the company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.
boohoo group plc CORRECTION: INTERIM RESULTS
CORRECTION: This replaces RNS number 9211B released at 7.00am on 26 September
2018. There was an error in the allocation of costs between distribution costs
and administrative expenses. All profit and earnings measures are unaffected.
Within the Statement of Comprehensive Income distribution costs of
£91,840,000 should read £97,772,000 (an increase of £5,932,000), and
administrative expenses of £100,434,000 should read £94,502,000 (a decrease
of £5,932,000). These changes are also reflected within Note 3, Segmental
Analysis.
boohoo group plc - interim results for the six months to 31 August 2018
"Leading the fashion eCommerce market"
6 months to 31 August 2018 6 months to 31 August 2017 Change
£ million £ million
Revenue 395.3 262.9 +50%
Gross profit 218.6 140.2 +56%
Gross margin 55.3% 53.3% +200bps
Adjusted EBITDA((1)) 39.6 27.8 +43%
% of revenue 10.0% 10.6% -60bps
Adjusted EBIT((2)) 35.3 24.8 +42%
% of revenue 8.9% 9.4% -50bps
Adjusted profit before tax((3)) 35.8 25.1 +43%
Profit before tax 24.7 20.3 +22%
Adjusted diluted earnings per share((4)) 1.99p 1.52p +31%
Diluted earnings per share 1.39p 1.22p +14%
Net cash((5)) at period end 155.6 119.2 +£36.4 m
Highlights
Group
· Revenue £395.3 million, up 50% (49% CER((6)))
· Strong revenue growth across all geographies (UK: +43%; international:
+62%). International now 41% of group revenue
· Strong balance sheet with net cash of £155.6 million (2018:
£119.2 million) with robust operating cash flow of £55.7 million (2018:
£33.0 million) and free cash flow of £24.5m (+93%)
· Distribution capabilities enhanced: PrettyLittleThing warehouse
relocation completed; and automation of Burnley site to drive future
efficiency is on schedule
boohoo
· Revenue £209.0 million, up 15% with market share gains in all
focus markets
· Gross margin 53.4%, up 110bps; retail gross margin 56.0%, up 160bps
· 6.7 million active customers((7)), up 15% on prior year
· Market share and brand awareness increasing, supported by
proposition investments
· Next phase of fit-out and automation of distribution centre in
Burnley on schedule for utilisation in 2019
PrettyLittleThing
· Revenue £168.6 million, up 132%
· Gross margin 57.3%, up 250bps; retail gross margin 59.0%, up 200bps
· 4.0 million active customers, up 99%
· Outstanding growth of market share and revenue in all markets
· Successful relocation of distribution centre to Sheffield with
significant capacity that can service the brand's growth
Nasty Gal
· Revenue £17.7 million, up 111%
· Gross margin 59.0%, down 480bps driven by refinements to the
customer proposition
· 0.6 million active customers, up 313%
· Strong revenue growth in the USA and international markets
Guidance
Group revenue growth for the year to 28 February 2019 is expected to be 38% to
43%, up from our previous guidance of 35% to 40%, with adjusted EBITDA margin
between 9% and 10%. We reiterate our medium term guidance to deliver sales
growth of at least 25% per annum and EBITDA margin of 10%.
Mahmud Kamani and Carol Kane, joint CEOs, commented:
"Our group results for the first half year show yet another strong
performance, delivering record sales and profits. All of our brands performed
extremely well across all territories as we continue to gain market share. We
achieved market-leading growth in all markets, with Rest of Europe and the USA
being particularly pleasing. Growth in the UK, our largest market, remains
very strong.
We successfully executed a major relocation of the distribution centre for
PrettyLittleThing, which represents a key milestone as we develop a
distribution network capable of generating £3 billion of net sales globally,
in line with our vision to lead the fashion eCommerce market. This relocation
was carried out with a low level of disruption to the operations of
PrettyLittleThing and is a credit to the project team. Our extended
distribution centre in Burnley, which will have a significant element of
automation to drive efficiency savings, is scheduled for operational use in
2019."
Investor and Analyst Meeting
A meeting for analysts will be held at 9.30am on 26 September 2018 at the
offices of Buchanan, 107 Cheapside, London, EC2V 6DN. boohoo group plc's
interim results 2019 are available at www.boohooplc.com
(http://www.boohooplc.com) .
A live audio webcast will be available at 9.30am via the following link:
http://webcasting.buchanan.uk.com/broadcast/5b5882ccd3653708d12fdadf
(https://protect-eu.mimecast.com/s/yVdaCvgOQhEDREOuQnSTn?domain=webcasting.buchanan.uk.com)
A replay will subsequently be available from 12 noon via the same link.
Enquiries
boohoo group plc
Neil Catto, Chief Financial Officer Tel: +44 (0)161 233 2050
Alistair Davies, Investor Relations Tel: +44 (0)161 233 2050
Clara Melia, Investor Relations Tel: +44 (0)20 3289 5520
Zeus Capital - Nominated adviser and joint broker
Nick Cowles/Andrew Jones (Corporate Finance) Tel: +44 (0)161 831 1512
John Goold/Benjamin Robertson (Corporate Broking) Tel: +44 (0)20 3829 5000
Jefferies Hoare Govett - Joint broker
Nick Adams/Max Jones Tel: +44 (0)20 7029 8000
Buchanan - Financial PR adviser boohoo@buchanan.uk.com
Richard Oldworth/ Sophie Wills, Maddie Seacombe/ Gemma Mostyn-Owen Tel: +44 (0)20 7466 5000
Notes:
(1) Adjusted EBITDA is calculated as profit before tax, interest,
depreciation, amortisation, share-based payment charges and exceptional items.
(2) Adjusted EBIT is calculated as profit before tax, interest, share-based
payment charges, amortisation of acquired PrettyLittleThing and Nasty Gal
intangible assets and exceptional items.
(3) Adjusted profit before tax is calculated as profit before tax, excluding
share-based payment charges, amortisation of acquired PrettyLittleThing and
Nasty Gal intangible assets and exceptional items.
(4) Adjusted diluted earnings per share is calculated as diluted earnings per
share, adding back amortisation of acquired PrettyLittleThing and Nasty Gal
intangible assets, share-based payment charges and exceptional items.
(5) Net cash is cash less borrowings.
(6) CER designates Constant Exchange Rate translation of foreign currency
revenue, which gives a truer indication of the performance in international
markets by removing year-to-year exchange rate movements when local currency
sales are converted to sterling.
(7) Active customers defined as having shopped in the last year.
About boohoo group plc
"Leading the fashion eCommerce market"
Founded in Manchester in 2006, the group started life as boohoo.com, an
inclusive and innovative brand targeting young, value-orientated customers.
For over 10 years, boohoo has been pushing boundaries to bring its customers
up-to-date and inspirational fashion, 24/7. boohoo has grown rapidly in the UK
and internationally, expanding its offering with range extensions into
menswear through boohooMAN.
In early 2017 the group extended its customer offering through the
acquisitions of the vibrant fashion brand PrettyLittleThing, and free-thinking
brand Nasty Gal. United by a shared customer value proposition, our brands
design, source, market and sell great quality clothes, shoes and accessories
at unbeatable prices. This investment proposition has helped us grow from a
single brand, into a major multi-brand online retailer, leading the fashion
eCommerce market for 16 to 30-year-olds around the world. Today the boohoo
group sells to over 11 million customer accounts across all its brands around
the world.
Cautionary Statement
Certain statements included or incorporated by reference within this
announcement may constitute "forward-looking statements" in respect of the
group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words and words of similar meaning as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects",
"believes", "intends", "plans", "potential", "targets", "goal" or "estimates".
By their nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be met and
reliance should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. No responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Company, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Company. Past performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an independent financial
adviser. Statements in this announcement reflect the knowledge and information
available at the time of its preparation. Liability arising from anything in
this announcement shall be governed by English law. Nothing in this
announcement shall exclude any liability under applicable laws that cannot be
excluded in accordance with such laws.
Review of the business
Group overview
Group revenue for the half year increased by 50% (49% CER) on the first half
of the previous year to £395.3 million (2018: £262.9 million). Revenue
growth across all territories and brands was strong.
Adjusted EBITDA was £39.6 million (2018: £27.8 million), an increase of 43%
on the first half of the previous year, with planned investments in the
customer proposition and marketing across the group leading to an adjusted
EBITDA margin of 10.0% (2018: 10.6%). Adjusted profit before tax was £35.8
million (2018: £25.1 million), an increase of 43%. Profit before tax was
£24.7 million (2018: £20.3 million), an increase of 22%. Adjusted diluted
earnings per share was 1.99p, up 31% on the prior half year. Basic earnings
per share rose to 1.42p, an increase of 14% (2018: 1.25p).
In the first half year, the group has again achieved outstanding growth with
profitability in line with guidance. All of our brands have performed
extremely well and the exceptional growth of PrettyLittleThing continues. The
group has achieved gains in market share across its key focus territories and
brand awareness has heightened through successful celebrity associations and
influencer campaigns. The customer proposition has been refined, with faster
delivery times, more delivery options, new payment methods and quicker
refunds. Gross margin has improved as a result of stronger sell through,
tighter control on stock cover and refinement of the customer proposition.
Cash flow generation was strong, with free cash flow up 93% to £24.5m.
Capital expenditure was £31.2 million as we invest in our infrastructure
ahead of our growth curve. Our net cash balance at the period end increased to
£155.6 million (2018: £119.2 million).
Distribution centres
The construction of our latest distribution centre extension at Burnley is now
complete and fit-out is underway with completion scheduled for 2019.
Automation is a key component of the fit-out which will greatly improve
picking efficiency. In addition to the new welfare facilities open to all
employees, we now provide a bus service to the Burnley distribution centre
from nearby towns. PrettyLittleThing's distribution centre relocation to
Sheffield was completed successfully during July and August. Exceptional dual
running expenses incurred during this period amounted to £6.4 million. The
addition of the Sheffield facility greatly increases our sales capacity, will
help underpin PLT's infrastructure needs and adds further operational
flexibility for the group as we continue to invest in our future distribution
network capable of generating £3 billion of net sales globally.
boohoo (including boohooMAN)
Performance
Revenue for the half year increased to £209.0 million, up 15% on the first
half of the previous year, with growth in all our key focus markets.
International growth continues to be strong, especially in northern Europe,
where we are rapidly gaining market share, whilst both UK and international
growth accelerated in the second quarter alongside an improved gross margin
performance. Gross margin increased by 110bps to 53.4%, driven by improved
stock control and refinement of the customer proposition.
Product
New product introductions and comprehensive size range offerings have
continued to drive growth. boohooMAN has performed strongly with an
ever-extending product range and increasing customer reach. Our offering
changes daily, with hundreds of new styles added and the very latest fashions
appearing within days or weeks of trends being spotted by our fashion experts
and offered to our customers at affordable prices. The breadth of the range
makes boohoo a destination to which customers keep returning to find their
desired items with ease.
Marketing
Marketing activity in the first half year included several high profile
celebrity campaigns: Zendaya, Stefflon Don, French Montana, Dele Alli and
Paris Hilton headed the cast and were instrumental in driving increased brand
awareness. Other activities continued using a successful formula of a mix of
media, including social media influencers, bloggers, TV, outdoor, email,
student events and digital acquisition channels. Our social media presence
continues to grow and we now have 5.0 million followers on Instagram, 2.9
million Facebook fans and 0.5 million followers on Twitter. We have opened
marketing offices in Paris and Los Angeles, which will provide local knowledge
and focal points for future campaigns and marketing initiatives as we continue
to drive awareness of the boohoo brand worldwide.
Customer interaction
Active customer numbers over the last 12 months increased by 15% to 6.7
million. Conversion rate to sale decreased from 4.5% to 4.1% of sessions, when
measured on website statistics alone. Order frequency increased 2%, with
customers placing an order with us, on average, 2.15 times in 12 months,
whilst the number of items per basket decreased 4% to 3.06.
We have continued to refine the customer proposition with free returns, next
day delivery and collection points available in more overseas markets. In the
UK, the cut-off time for next day delivery has been extended to 11pm and 12pm
for next day evening delivery. SMS messaging has been introduced in the UK to
keep customers informed of delivery status and we are trialling artificial
intelligence in customer contact response. We have 17 country-specific
websites and have plans to introduce more foreign language websites and more
payment options in overseas markets during the year, in line with our aim to
attain best-in-class customer service.
Technology
The principal technology projects completed in the first half year include new
payment solutions and more country returns portals, which give more returns
flexibility and enable us to refund customers immediately after the courier
collects their parcel. We have also introduced social logins for UK
customers. Projects underway include a new app with increased functionality
and the warehouse automation project, which will drive significant
efficiencies.
PrettyLittleThing
Performance
PrettyLittleThing ("PLT") again achieved outstanding revenue growth of 132%
over the first half of the previous year, despite some disruption to sales
during the warehouse relocation. Growth across all territories was strong.
Increased costs of working were incurred whilst the warehouse was relocated,
which have been classified as exceptional within distribution costs and
administrative expenses, and amount to £6.4 million. These comprise the extra
costs of operating two sites in the pre go-live and migration periods, dual
shipping of customer orders, physically moving stock between the two sites and
increased customer service costs to deal with queries during the migration
period. Gross margin has increased to 57.3% (2018: 54.8%), with stronger
sell-through and refinements to the customer proposition.
Product
PLT brings the latest and most relevant celebrity looks at affordable prices
to our customers, with a choice of over 13,000 styles and new items available
daily. Our product range has continued to expand during the first half of the
year with strong growth being seen in the "shape" ranges including Petite,
Curve and Plus. During the first half year we continued to bring the latest
celebrity looks to customers including collaborations with UK Radio presenter,
Maya Jama, and American Hip-Hop stylist, Karl Kani.
Marketing
We have continued to extend our social media reach by increasing the number of
social media influencers, combined with celebrity campaigns and
collaborations. These include Maya Jama, Karl Kani and the recently-announced
collaboration with Ashley Graham, one of America's most successful models, all
of which help the brand reach its target audience.
Customer interaction
We now support eight country-specific websites and have plans for further
foreign language sites, following the success of the French language site,
introduced in the previous financial year. For the UK market, we offer a wide
range of free return options. We have also introduced new returns options in
international markets, accelerating the point of refund to enhance the
customer experience.
Active customer numbers over the last 12 months increased by 99% to 4.0
million. We have 1.4 million followers on Facebook (an increase of 40% in 12
months), 0.2 million followers on Twitter, 6.3 million Instagram followers (an
increase of 200% in 12 months), as well as a presence on several other social
media channels.
Technology
PLT operates iOS and android apps for the UK and US markets and the apps have
been developed throughout the period to improve the customer experience and
conversion rates. There have been continuous improvements to the performance
and user experience of all customer-facing websites, with key highlights being
the introduction of a new 'Contact Us' page to more effectively manage
customer queries and enhance product information. We regularly review payment
options offered to customers, adding new methods pertinent to each market.
Nasty Gal
Performance
Revenue growth across all territories has been very strong at 111%. The USA is
the largest market for the brand and revenue growth there remains robust. The
brand continues to see strong growth outside the US, albeit from a low base.
Gross margin at 59.0% (2018: 63.8%) has remained at a pleasing level as the
customer proposition is refined in each territory. Conversion and the number
of items per basket have also risen.
Product
Our product range continues to broaden and targets price points higher than
those of boohoo. The brand has its roots in Los Angeles and portrays a
distinctive look for the confident girl who like to express her personality
through the clothes she wears. Now, with over 6,000 styles in stock, the
brand's appeal is rising and reaching a larger audience.
Marketing
The marketing strategy has focussed on building and extending the number of
bloggers and influencers and staging key media events to re-engage customer
interest and promote brand loyalty.
Customer interaction
Nasty Gal has six country and regional websites, developed since start-up in
March 2017 and Android and iOS apps for the UK, US and the Australian markets.
On social media we have 2.8 million followers on Instagram, 1.2 million
Facebook likes and 0.2 million followers on Twitter.
Financial review
Group revenue by brand
6 months to 6 months to Change Change
31 August 2018 31 August 2017
£000 £000 CR
boohoo 209,006 181,824 +15% +13%
PrettyLittleThing 168,612 72,675 +132% +134%
Nasty Gal 17,691 8,376 +111% +118%
395,309 262,875 +50% +49%
Group revenue by geographical market
6 months to 6 months to Change Change
31 August 2018 31 August 2017
£000 £000 CER
UK 234,057 163,381 +43% +43%
Rest of Europe 51,250 27,791 +84% +72%
USA 68,171 39,596 +72% +74%
Rest of world 41,831 32,107 +30% +27%
395,309 262,875 +50% +49%
KPIs
boohoo
6 months to 6 months to Change
31 August 2018 31 August 2017
Active customers((1)) 6.7 million 5.8 million +15%
Number of orders 7.2 million 6.4 million +13%
Order frequency((2)) 2.15 2.11 +2%
Conversion rate to sale ((3)) 4.1% 4.5% -40bps
Average order value((4)) £40.56 £39.92 +2%
Number of items per basket 3.06 3.17 -4%
PrettyLittleThing
6 months to 6 months to Change
31 August 2018 31 August 2017
Active customers((1)) 4.0 million 2.0 million +99%
Number of orders 6.5 million 2.9 million +127%
Order frequency((2)) 2.77 2.24((5)) +24%
Conversion rate to sale ((3)) 3.2% 3.5%((5)) -30bps
Average order value((4)) £39.39 £36.68((5)) +7%
Number of items per basket 2.83 2.51((5)) +13%
Nasty Gal
6 months to 6 months to Change
31 August 2018 31 August 2017
Active customers((1)) 0.6 million 0.2 million +313%
Number of orders 0.5 million 0.2 million +163%
Order frequency((2)) 1.45 1.24 +17%
Conversion rate to sale ((3)) 2.3% 1.2% +110bps
Average order value((4)) £50.27 £55.46 -9%
Number of items per basket 3.01 2.77 +9%
1. Defined as having shopped in the last 12 months
2. Defined as number of orders in last 12 months divided by number of
active customers
3. Defined as the percentage of orders taken to internet sessions
4. Calculated as gross sales including sales tax divided by the number
of orders
5. PLT prior period numbers restated using corrected data and website
only sessions
Consolidated summary income statement
6 months to 6 months to Change
31 August 2018 31 August 2017
£000 £000
Revenue 395,309 262,875 +50%
Cost of sales (176,732) (122,643)
Gross profit 218,577 140,232 +56%
Gross margin 55.3% 53.3% 200 bps
Operating costs (179,121) (112,534)
Other income 120 53
Adjusted EBITDA 39,576 27,751 +43%
Adjusted EBITDA margin % 10.0% 10.6% -60 bps
Depreciation (3,090) (1,715)
Amortisation of other intangible assets (1,163) (1,242)
Adjusted EBIT 35,323 24,794 +42%
Adjusting items:
Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets (2,224) (2,224)
Equity-settled share-based payment charges (2,464) (2,557)
Exceptional costs - warehouse relocation (6,436) -
Operating profit 24,199 20,013 +21%
Finance income 577 347
Finance expense (79) (78)
Profit before tax 24,697 20,282 +22%
Tax (4,867) (4,698)
Profit after tax for the period 19,830 15,584 +27%
Diluted earnings per share 1.39p 1.22p +14%
Adjusted profit after tax for the period 28,872 19,486 +48%
Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets (2,224) (2,224)
Share-based payment charges (2,464) (2,557)
Exceptional costs - warehouse relocation (6,436) -
Adjustment for tax 2,082 879
Profit after tax for the period 19,830 15,584
Adjusted profit for the period attributable to shareholders of the company 23,361 17,658 +32%
Adjusted diluted earnings per share 1.99p 1.52p +31%
Exceptional costs
Exceptional costs include the cost of relocating PrettyLittleThing's inventory
from Burnley to a new distribution centre at Sheffield, including the element
of dual running costs and additional carriage for split orders despatched from
two sites.
Taxation
The effective rate of tax for the half-year was 19.7% (2018: 23.2%), which is
more than the blended UK statutory rate of tax for the year of 19.0% due to
disallowable items, principally share-based payment charges in
PrettyLittleThing.com Limited.
Earnings per share
Basic earnings per share increased by 14% from 1.25p to 1.42p. Adjusted
diluted earnings per share was 1.99p, up 31% on the prior year first half
year.
Consolidated statement of financial position
6 months to 6 months to
31 August 2018 31 August 2017
£000 £000
Intangible assets 29,074 33,385
Property, plant and equipment 98,505 49,116
Financial assets 585 175
Deferred tax asset 4,153 6,861
Non-current assets 132,317 89,537
Working capital (53,597) (17,068)
Net financial liabilities (1,895) (11,513)
Cash and cash equivalents 163,889 129,910
Interest bearing loans and borrowings (8,337) (10,719)
Deferred tax liability (2,001) (2,348)
Current tax liability (4,707) (5,738)
Net assets 225,669 172,061
Liquidity and financial resources
Free cash flow was £24.5 million compared to £12.8 million in the previous
financial half-year. Capital expenditure was £31.2 million, which includes
the following investments: IT £2.6 million, offices £4.9 million and
distribution centre £23.7 million. The closing cash balance for the group was
£163.9 million and the net cash balance, after deducting bank loans, was
£155.6 million.
Consolidated cash flow statement
6 months to 6 months to
31 August 2018 31 August 2017
£000 £000
Profit for the period 19,830 15,584
Depreciation charges and amortisation 6,477 5,181
Share-based payments charge 2,464 2,557
Tax expense 4,867 4,698
Finance income (577) (347)
Finance expense 79 78
Increase in inventories (5,054) (19,295)
Increase in trade and other receivables (17,569) (5,218)
Increase in trade and other payables 45,216 29,729
Operating cash flow 55,733 32,967
Capital expenditure and intangible asset purchases (31,185) (20,217)
Free cash flow 24,548 12,750
Proceeds from the issue of ordinary shares 2,087 50,944
Finance income received 495 253
Finance expense paid (79) (78)
Tax paid (4,546) (3,098)
Repayment of borrowings (1,191) (1,191)
Net cash flow 21,314 59,580
Cash and cash equivalents at beginning of period 142,575 70,330
Cash and cash equivalents at end of period 163,889 129,910
Outlook
We continue to maintain a highly positive outlook for on-line fashion
globally. The group's multi-brand approach appeas to a wide consumer audience.
The demand for affordable online fashion continues unabated and provides the
opportunity for continued growth globally. Growth in the UK, our largest
market, remains strong, whilst international growth continues at a higher
rate.
Our focus is to maintain an outstanding customer proposition, with the latest
fashion at great prices, combined with excellent customer service. To this end
we have a plan of continuous investment in systems and technology to ensure we
offer an optimal online shopping experience. International expansion will
continue as we add more country-specific websites, refine our customer
proposition and raise brand awareness through marketing and social media.
Group revenue growth for the year to 28 February 2019 is expected to be 38% to
43%, up from our previous guidance of 35% to 40%, with adjusted EBITDA margin
between 9% and 10%. We reiterate our medium term guidance to deliver sales
growth of at least 25% per annum and EBITDA margin of 10%.
Mahmud Kamani Carol Kane Neil Catto
Joint Chief Executive Joint Chief Executive Chief Financial Officer
26 September 2018
Unaudited consolidated statement of comprehensive income
for the period ended 31 August 2018
Note 6 months to 6 months to Year to 28 February
31 August 31 August 2018
2018 2017
(unaudited) (unaudited) (audited)
£000 £000 £000
Revenue 3 395,309 262,875 579,800
Cost of sales (176,732) (122,643) (273,445)
Gross profit 218,577 140,232 306,355
Distribution costs (97,772) (56,002) (126,757)
Exceptional distribution costs (5,932) - -
Other distribution costs (91,840) (56,002) (126,757)
Administrative expenses (94,502) (62,046) (132,623)
Exceptional administrative expenses (504) - -
Other administrative expenses (93,998) (62,046) (132,623)
Amortisation of acquired intangibles (2,224) (2,224) (4,449)
Other income 4 120 53 159
Operating profit 24,199 20,013 42,685
Finance income 577 347 774
Finance expense (79) (78) (146)
Profit before tax 5 24,697 20,282 43,313
Taxation (4,867) (4,698) (7,313)
Profit for the period 19,830 15,584 36,000
Profit for the period attributable to:
Owners of the parent company 16,309 14,146 31,652
Non-controlling interests 3,521 1,438 4,348
19,830 15,584 36,000
Total other comprehensive income/(expense) for the year, net of income tax
(Gain)/loss reclassified to profit and loss during the year (1,518) 4,978 6,516
Fair value (loss)/gain on cash flow hedges during the year ((1)) (7,703) (4,729) 12,981
Total comprehensive income for the period 10,609 15,833 55,497
Total comprehensive income attributable to:
Equity attributable to owners of the parent company 7,088 14,395 51,149
Non-controlling interests 3,521 1,438 4,348
Total equity 10,609 15,833 55,497
Earnings per share 6
Basic 1.42 1.25p 2.78p
Diluted 1.39 1.22p 2.71p
1. Net fair value gains/losses on cash flow hedges will be
reclassified to profit or loss during the two years to 31 August 2020.
Unaudited consolidated statement of financial position
at 31 August 2018
Note 6 months to 31 August 2018 6 months to 31 August 2017 Year to 28 February
2018
(unaudited) (unaudited) (audited)
£000 £000 £000
Assets
Non-current assets
Intangible assets 29,074 33,385 30,877
Property, plant and equipment 98,505 49,116 71,994
Financial assets 585 175 2,445
Deferred tax 7 4,153 6,861 6,479
Total non-current assets 132,317 89,537 111,795
Current assets
Inventories 53,302 53,465 48,248
Trade and other receivables 8 35,149 17,258 17,499
Financial assets 1,871 1,123 6,770
Cash and cash equivalents 163,889 129,910 142,575
Total current assets 254,211 201,756 215,092
Total assets 386,528 291,293 326,887
Liabilities
Current liabilities
Trade and other payables 9 (142,048) (87,791) (96,670)
Interest bearing loans and borrowings (2,382) (2,382) (2,382)
Financial liabilities (1,605) (8,576) (837)
Current tax liability (4,707) (5,738) (4,505)
Total current liabilities (150,742) (104,487) (104,394)
Non-current liabilities
Interest bearing loans and borrowings (5,955) (8,337) (7,146)
Financial liabilities (2,161) (4,060) (467)
Deferred tax 7 (2,001) (2,348) (2,101)
Total liabilities (160,859) (119,232) (114,108)
Net assets 225,669 172,061 212,779
Equity
Share capital 10 11,602 11,494 11,496
Share premium 604,555 601,994 602,578
Capital redemption reserve 100 100 100
Hedging reserve (1,310) (11,337) 7,911
EBT reserve (347) (352) (351)
Translation reserve 6 (4) 168
Reconstruction reserve (515,282) (515,282) (515,282)
Non-controlling interests 12,551 5,416 8,761
Retained earnings 113,794 80,032 97,398
Total equity 225,669 172,061 212,779
Unaudited consolidated statement of changes in equity
Share Share premium Capital redemption reserve Hedging reserve EBT reserve Transla-tion reserve Recon-struction reserve Non-controlling interest Retained earnings Total
capital equity
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 March 2018 11,496 602,578 100 7,911 (351) 168 (515,282) 8,761 97,398 212,779
Issue of shares 106 1,981 - - - - - - - 2,087
Issue of shares by EBT - (4) - - 4 - - - - -
Share-based payments credit - - - - - - - 269 2,195 2,464
Excess deferred tax on share-based payment charge (2,108) (2,108)
- - - - - - - -
Profit for the period - - - - - - - 3,521 16,309 19,830
Translation of foreign operations - - - - - (162) - - - (162)
Gain reclassified to profit and loss - - - (1,518) - - - - - (1,518)
Fair value loss on cash flow hedges during the year - - - (7,703) - - - - - (7,703)
Balance at 31 August 2018 11,602 604,555 100 (1,310) (347) 6 (515,282) 12,551 113,794 225,669
Balance at 1 March 2017 11,233 551,720 100 (11,586) (761) 5 (515,282) 3,978 61,089 100,496
Issue of shares 261 50,683 - - - - - - - 50,944
Issue of shares by EBT - (409) - - 409 - - - - -
Share-based payments credit - - - - - - - - 2,557 2,557
Excess deferred tax on share-based payment charge
- - - - - - - - 2,240 2,240
Profit for the period - - - - - - - 1,438 14,146 15,584
Translation of foreign operations - - - - - (9) - - - (9)
Loss reclassified to profit and loss - - - 4,978 - - - - - 4,978
Fair value loss on cash flow hedges during the year - - - (4,729) - - - - - (4,729)
Balance at 31 August 2017 11,494 601,994 100 (11,337) (352) (4) (515,282) 5,416 80,032 172,061
Balance at 28 February 2017 11,233 551,720 100 (11,586) (761) 5 (515,282) 3,978 61,089 100,496
Issue of shares 263 50,858 - - 410 - - - - 51,531
Share-based payments credit - - - - - - - 435 2,834 3,269
Excess deferred tax on share-based payments - - - - - - - - 1,823 1,823
Profit for the year - - - - - - - 4,348 31,652 36,000
Translation of foreign operations - - - - - 163 - - - 163
Loss reclassified to profit and loss - - - 6,516 - - - - - 6,516
Fair value gain on cash flow hedges during the year - - - 12,981 - - - - - 12,981
Balance at 28 February 2018 11,496 602,578 100 7,911 (351) 168 (515,282) 8,761 97,398 212,779
Unaudited consolidated cash flow statement
for the period ended 31 August 2018
Note 6 months to 31 August 2018 6 months to 31 August 2017 Year to 28 February 2018
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash flows from operating activities
Profit for the period 19,830 15,584 36,000
Adjustments for:
Share-based payments charge 2,464 2,557 3,269
Depreciation charges and amortisation 6,477 5,181 10,978
Finance income (577) (347) (774)
Finance expense 79 78 146
Tax expense 4,867 4,698 7,313
33,140 27,751 56,932
Increase in inventories (5,054) (19,295) (14,078)
Increase in trade and other receivables 8 (17,569) (5,218) (5,393)
Increase in trade and other payables 9 45,216 29,729 38,780
Cash generated from operations 55,733 32,967 76,241
Tax paid (4,546) (3,098) (7,227)
Net cash generated from operating activities 51,187 29,869 69,014
Cash flows from investing activities
Acquisition of intangible assets (1,584) (1,405) (2,412)
Acquisition of property, plant and equipment (29,601) (18,812) (43,972)
Finance income received 495 253 612
Net cash used in investing activities (30,690) (19,964) (45,772)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 2,087 51,694 52,281
Share issue costs written off to share premium - (750) (750)
Finance expense paid (79) (78) (146)
Repayment of borrowings (1,191) (1,191) (2,382)
Net cash generated from financing activities 817 49,675 49,003
Increase in cash and cash equivalents 21,314 59,580 72,245
Cash and cash equivalents at beginning of period 142,575 70,330 70,330
Cash and cash equivalents at end of period 163,889 129,910 142,575
Notes
(forming part of the interim report and accounts)
1 Accounting policies
General information
boohoo group plc is a public limited company incorporated and domiciled in
Jersey and listed on the Alternative Investment Market (AIM) of the London
Stock Exchange. Its registered office address is: 12 Castle Street, St Helier,
Jersey, JE2 3RT. The company was incorporated on 19 November 2013.
Basis of preparation
The interim condensed financial statements for the six months ended 31 August
2018 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 Annual Report and Accounts for
the year ended 28 February 2018, 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 (Jersey) Law
1991 applicable to companies reporting under IFRS.
The interim condensed financial statements contained in this report are not
audited and do not constitute statutory accounts within the meaning of
Companies (Jersey) Law 1991. The Annual Report and Accounts for the year ended
28 February 2018 has been filed with the Jersey Companies Registry. The
auditors' reports on those accounts was unqualified and did not include
reference to any matters on which the auditors were required to report by
exception under Companies (Jersey) Law 1991.
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 and Financial Reviews. The Financial Review describes the group's
financial position, cash flows and bank facilities.
The interim financial statements are unaudited and were approved by the board
of directors on 25 September 2018.
Going concern
The directors have reviewed the group's forecast and projections, including
assumptions concerning capital expenditure and expenditure commitments and
their impact on cash flows, and have a reasonable expectation that the group
has adequate financial resources to continue its operations for the
foreseeable future. For this reason they have continued to adopt the going
concern basis in preparing the financial statements.
In preparing the interim announcement, the directors have also made reasonable
and prudent judgements and estimates and prepared the interim announcement on
the going concern basis. The interim announcement and management report
contained herein give a true and fair view of the assets, liabilities,
financial position and profit and loss of the group.
Accounting policies
The interim financial statements have been prepared in accordance with the
accounting policies set out in the group's Annual Report and Accounts for the
year ended 28 February 2018. IFRS 9, "Financial instruments", is effective for
the current accounting period, but will not have an effect on the accounts as
foreign currency hedging contracts will continue to be accounted for as hedges
under the standard. IFRS 15, "Revenue from contracts with customers", is
effective for the current accounting period, but will not have an effect on
the accounts, as revenue from online sales is already recognised when the
customer is estimated to have received the goods and revenue from annual
delivery service is already spread over the period of the service. IFRS 16,
"Leases", is effective for accounting periods commencing 1 January 2019 and
will have an effect in the accounts for the year ended 29 February 2020.
Taking account of leases that exist at 31 August 2018, the effect is expected
to be an increase in assets and liabilities of £5 million, additional
depreciation charges and interest charges in the first year of application of
the standard of £1 million and £0.1 million respectively per annum and a
reduction on operating expenses of £1.1 million. The accounting treatment for
elements of the cost of third party logistics service for PLT is under review
with respect to IFRS 16.
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
2019 to be unchanged from those set out in the group's Annual Report and
Accounts for the year ended 28 February 2018, which in summary are:
competition risk; fashion and consumer demands risk; systems and technical
risk; supply chain risk; loss of key facilities; people risk; customer
dissatisfaction; and financial risk. These are set out in detail on pages 22
to 24 of the group's Annual Report and Accounts for the year ended 28 February
2018, a copy of which is available on the group's website, www.boohooplc.com
(http://www.boohooplc.com) . In addition, the group is closely monitoring the
potential impacts of the UK's leaving the EU.
3 Segmental analysis
6 months ended 31 August 2018
boohoo PrettyLittleThing Nasty Gal Total
£000 £000 £000 £000
Revenue 209,006 168,612 17,691 395,309
Cost of sales (97,468) (72,013) (7,251) (176,732)
Gross profit 111,538 96,599 10,440 218,577
Distribution costs (46,671) (46,534) (4,567) (97,772)
Segment result 64,867 50,065 5,873 120,805
Administrative expenses - - - (96,726)
Other income - - - 120
Operating profit - - - 24,199
Finance income - - - 577
Finance expense (79)
Profit before tax - - - 24,697
6 months ended 31 August 2017
boohoo PrettyLittleThing Nasty Gal Total
£000 £000 £000 £000
Revenue 181,824 72,675 8,376 262,875
Cost of sales (86,751) (32,859) (3,033) (122,643)
Gross profit 95,073 39,816 5,343 140,232
Distribution costs (38,514) (15,636) (1,852) (56,002)
Segment result 56,559 24,180 3,491 84,230
Administrative expenses - - - (64,270)
Other income - - - 53
Operating profit - - - 20,013
Finance income - - - 347
Finance expense - - - (78)
Profit before tax - - - 20,360
Year ended 28 February 2018
boohoo PrettyLittleThing Nasty Gal Total
£000 £000 £000 £000
Revenue 374,115 181,269 24,416 579,800
Cost of sales (182,394) (81,175) (9,876) (273,445)
Gross profit 191,721 100,094 14,540 306,355
Distribution costs (80,417) (40,661) (5,679) (126,757)
Segment result 111,304 59,433 8,861 179,598
Administrative expenses - - - (137,072)
Other income - - - 159
Operating profit - - - 42,685
Finance income - - - 774
Finance expense - - - (146)
Profit before tax - - - 43,313
Revenue by geographic region
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £00
UK 234,057 163,381 355,614
Rest of Europe 51,250 27,791 66,281
USA 68,171 39,596 92,690
Rest of world 41,831 32,107 65,215
395,309 262,875 579,800
4 Other income
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
Rental income 120 53 159
5 Profit before tax
Profit before tax is stated after charging: 6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
Operating lease rentals for buildings 988 523 1,509
Equity-settled share-based payment charges 2,464 2,557 3,269
Depreciation of property, plant and equipment 3,090 1,715 3,997
Amortisation of intangible assets 1,163 1,242 2,532
Amortisation of acquired intangible assets 2,224 2,224 4,449
6 Earnings per share
Basic earnings per share is calculated by dividing profit after tax
attributable to members of the holding company by the weighted average number
of shares in issue during the year. Own shares held by the Employee Benefit
Trust are eliminated from the weighted average number of shares. Diluted
earnings per share is calculated by dividing the profit after tax attributable
to members of the holding company by the weighted average number of shares in
issue during the year, adjusted for potentially dilutive share options.
6 months to 31 August 2018 6 months to 31 August 2017 Year to 28 February 2018
Weighted average shares in issue for basic earnings per share 1,149,311,146 1,132,106,923 1,138,722,751
Dilutive share options 24,897,209 26,154,173 27,108,839
Weighted average shares in issue for diluted earnings per share 1,174,208,355 1,158,261,096 1,165,831,590
Earnings attributable to owners of the parent company (£000) 16,309 14,146 31,652
Basic earnings per share 1.42p 1.25p 2.78p
Diluted earnings per share 1.39p 1.22p 2.71p
Earnings attributable to owners of the parent company (£000) 16,309 14,146 31,652
Adjusting items:
Amortisation of intangible assets arising on acquisitions 2,224 2,224 4,449
Share-based payment charges 2,464 2,557 3,269
Exceptional costs - warehouse relocation 6,436 - -
Adjustment for tax (2,082) (879) (1,408)
Adjustment for non-controlling interests (1,990) (390) (352)
Adjusted earnings 23,361 17,658 37,610
Adjusted basic earnings per share 2.03p 1.56p 3.30p
Adjusted diluted earnings per share 1.99p 1.52p 3.23p
7 Deferred tax
Assets
Depreciation in excess of capital allowances Share-based payments Total
£000 £000 £000
At 1 March 2017 232 4,262 4,494
At 1 September 2017 188 6,673 6,861
At 1 March 2018 160 6,319 6,479
Recognised in statement of comprehensive income (160) (58) (218)
Credit in equity - (2,108) (2,108)
At 31 August 2018 - 4,153 4,153
Liabilities
Capital allowances in excess of depreciation Business combinations Total
£000 £000 £000
At 1 March 2017 - (2,597) (2,597)
At 1 September 2017 - (2,348) (2,348)
At 1 March 2018 - (2,101) (2,101)
Recognised in statement of comprehensive income (147) 247 100
At 31 August 2018 (147) (1,854) (2,001)
Recognition of the deferred tax assets is based upon the expected generation
of future taxable profits. The deferred tax asset is expected to be recovered
in more than one year's time and the deferred tax liability will reverse in
more than one year's time as the intangible assets are amortised.
8 Trade and other receivables
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
Trade receivables 23,405 14,761 13,381
Prepayments 10,482 2,355 3,658
Accrued income 1,262 142 460
35,149 17,258 17,499
9 Trade and other payables
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
Trade payables 36,945 29,545 34,203
Amounts owed to related party undertakings - 1 31
Other creditors 1,242 2,585 1,084
Accruals 91,215 43,543 50,399
Deferred income 6,927 8,189 5,556
Taxes and social security payable 5,719 3,928 5,397
142,048 87,791 96,670
10 Share capital
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
At start of period 11,496 11,233 11,233
Share issues 106 261 263
At end of period 11,602 11,494 11,496
Share capital at period end: 1,160,160,400 authorised and fully paid ordinary
shares of 1p each (2018: 1,149,419,722). No dividends have been paid or are
payable for the period ended 31 August 2018 (2018: £nil).
11 Capital commitments
Capital expenditure contracted for at the end of the reporting period but not
yet incurred is as follows:
6 months to 31 August 2018 6 months to 31 August 2017 Year to
28 February 2018
£000 £000 £000
Property, plant and equipment 6,870 17,449 27,999
12 Contingent liabilities
From time to time, the group can be subject to various legal proceedings and
claims that arise in the ordinary course of business which may include cases
relating to the group's brands and trading names. All such cases brought
against the group are robustly defended and a liability is recorded only when
it is probable that the case will result in a future economic outflow and that
the outflow can be reliably measured.
As at 31 August 2018, there are no pending claims or proceedings against the
group which in the opinion of the directors are expected to have a material
adverse effect on its liquidity or operations.
Appendix - growth rates on prior period revenue by region
Revenue by period for the year to 28 February 2019 (FY19)
£'000 3m to 31 May 3m to 31 August 6m to 31 August
FY19 FY18 yoy % yoy % CER FY19 FY18 yoy % yoy % FY19 FY18 yoy % yoy %
CER CER
Total 183,561 120,077 53% 52% 211,748 142,798 48% 47% 395,309 262,875 50% 49%
Revenue by region
UK 110,738 74,532 49% 49% 123,319 88,849 39% 39% 234,057 163,381 43% 43%
ROE 22,257 12,220 82% 71% 28,993 15,571 86% 73% 51,250 27,791 84% 72%
USA 31,389 17,906 75% 78% 36,782 21,690 70% 71% 68,171 39,596 72% 74%
ROW 19,177 15,419 24% 22% 22,654 16,688 36% 31% 41,831 32,107 30% 27%
Revenue by period for the year to 28 February 2018 (FY18)
£'000 4m to 31 December 2m to 28 February 12m to 28 February
FY18 FY17 yoy % yoy % CER FY18 FY17 yoy % yoy % FY18 FY17 yoy % yoy %
CER CER
Total 228,215 114,294 100% 93% 88,710 53,025 67% 65% 579,800 294,635 97% 92%
Revenue by region
UK 135,642 65,465 107% 107% 56,592 34,820 63% 63% 355,614 181,981 95% 95%
ROE 28,232 13,963 102% 76% 10,258 6,059 69% 54% 66,281 34,735 91% 73%
USA 39,618 19,299 105% 102% 13,475 5,910 128% 133% 92,690 40,435 129% 122%
ROW 24,723 15,567 59% 46% 8,385 6,236 34% 29% 65,215 37,484 74% 64%
£'000 3m to 31 May 3m to 31 August 6m to 31 August
FY18 FY17 yoy % yoy % CER FY18 FY17 yoy % yoy % FY18 FY17 yoy % yoy %
CER CER
Total 120,077 58,222 106% 98% 142,798 69,094 107% 104% 262,875 127,316 106% 101%
Revenue by region
UK 74,532 37,396 99% 99% 88,849 44,300 101% 101% 163,381 81,696 100% 100%
ROE 12,220 6,938 76% 61% 15,571 7,775 100% 92% 27,791 14,713 89% 77%
USA 17,906 6,385 180% 155% 21,690 8,841 145% 136% 39,596 15,226 160% 145%
ROW 15,419 7,503 105% 80% 16,688 8,178 104% 98% 32,107 15,681 105% 89%
CER in this appendix for the year ended 28 February 2018 is calculated using
exchange rates prevailing during the year ending 28 February 2018.
Nomenclature: ROE - rest of Europe; ROW - rest of world; yoy - year-on-year;
CER - constant exchange rate
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