REG - boohoo group plc - Interim results for the 6 months ended 31 Aug 2023
03/10/2023 07:00
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RNS Number : 4447O boohoo group plc 03 October 2023
For IMMEDIATE release
3 October 2023
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 as it forms part of the domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK
MAR"). 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 - results for the 6 months ended 31 August 2023
("boohoo" or "the Group")
In the last six months the Group has made substantial progress, delivering key
operational and strategic projects and an improvement in adjusted EBITDA
margin. Revenues in core brands declined 10%, consistent with prior guidance
for Group revenues to decline by 10% to 15%, with more significant declines in
our labels following the successful decision taken to target more profitable
sales, which contributed to improved Group profitability. Investments in key
strategic initiatives are underpinned by our significant cost savings
programme.
Customer first
· Captured supply chain deflation and lower input prices, and
reinvested these savings to drive faster lead times and lower prices for
customers
· Strengthened test & repeat model with significantly improved lead
times
· Average selling prices down year on year in comparison to a UK
clothing market which has seen price inflation of 8%
· Increased mix of entry price point categories to reinforce value for
customers
Investing for growth
· Best-in-class logistics through automation in Sheffield delivering
record levels of productivity
· US distribution centre launched successfully, upgrading our
proposition with next day & express delivery options into a key strategic
market. Further brands to be phased over the next twelve months
· Successfully migrated a number of our brands onto our in-house
technology platforms, giving greater agility and cost savings
Delivering sustainable ROI
· Identified more than £125 million of annualised cost savings across
cost of goods, supply chain and overheads, to be delivered across FY24 &
FY25, supporting a disciplined reinvestment programme
· Gross margin strengthened in the first half, despite significant
investments into reducing lead times in the supply chain and into price
reductions for the customer
· Delivered significant cost savings that have supported a 30bps
increase in adjusted EBITDA margin
· Stock down £94 million / 35% year on year due to our leaner,
lighter, faster inventory model
· Strong balance sheet and significant liquidity position of £290
million provide the necessary foundations to continue to invest in growth
John Lyttle, Group CEO, commented:
"Over the first half we have made substantial progress across key projects and
initiatives, including the launch of our US distribution centre. We have seen
significant improvements in sourcing lead times and invested in pricing to
reinforce our value credentials. We have identified more than £125 million of
annualised cost savings that support our investment programme. Our confidence
in the medium-term prospects for the Group remains unchanged as we execute on
our key priorities where we see a clear path to improved profitability and
getting back to growth."
Summary of HY 24 performance
6 months to 31 August 2023 6 months to 31 August 2022 Change
(1H FY24) (1H FY23) 2023
on 2022
£ million £ million
Revenue 729.1 882.4 (17%)
Gross profit 389.2 463.5 (16%)
Gross margin 53.4% 52.5% 90bps
Adjusted EBITDA((1)) 31.3 35.5 (12%)
% of revenue 4.3% 4.0% 30bps
Adjusted EBIT((2)) (3.9) 9.6 (141%)
% of revenue (0.5%) 1.1% (160)bps
Adjusted (loss)/profit before tax((3)) (9.1) 6.2 (247%)
Adjusted (loss)/diluted earnings per share((4)) (0.91)p 0.29p (414%)
Net debt((5)) at period end (35.0) (10.4) (24.6)m
Financial & Operational highlights
· Revenue £729.1 million, down 17% vs last year, with UK down 19% and
International down 15%
o Revenues in core brands((6)), declined 10%, consistent with prior guidance
of -10% to -15%
o Successfully targeted more profitable sales in our labels which resulted
in more significant revenue declines
· Gross margin 53.4%, up 90bps vs last year, despite significant
reinvestment of supply chain and input cost deflation into lead times and
lower prices for customers. Year on year margin improvement reflects tighter
inventory management
· Inventory significantly reduced, down £94 million or 35% year on
year
· Adjusted EBITDA of £31.3 million. Adjusted EBITDA margin of 4.3%, up
30bps year on year reflecting improvements in gross margin, distribution cost
efficiencies from automation and overhead cost reduction
· £36.3 million of capital expenditure as we build the infrastructure
for future growth, including capacity expansion as part of the Sheffield
automation project and US distribution centre ahead of its launch
· Free cash outflow of £12.9 million, reflecting capital expenditure
in strategic projects. Balance sheet strength maintained with £290 million of
liquidity headroom on the Group's £325 million Revolving Credit Facility
Outlook and Guidance
The Group's focus remains on executing its back to growth strategy through
disciplined investments across product, price and proposition. Given the
slower volume recovery than previously anticipated and the continued targeting
of more profitable sales within our labels, revenues for the year ending 28
February 2024 ("FY24") are now expected to decline by 12% to 17%.
In line with prior guidance, adjusted EBITDA margins are expected to be
between 4% and 4.5% given the strong progress made on gross margin and cost
control. Adjusted EBITDA is expected to be between £58 million to £70
million. Capital expenditure is expected to be approximately £75 million.
The Group's back to growth strategy will unlock the significant growth
opportunity. The Board's confidence remains unchanged in rebuilding
profitability over the medium term, generating a 6% to 8% adjusted EBITDA
margin while getting back to growth through: continued investment in product,
price and proposition, volume growth, international expansion, unlocking cost
deflation; and cost control.
Investor and analyst meeting
A meeting and video webcast for analysts & investors will be held at 9am
(UK time) today at the offices of boohoo, 10 Great Pulteney Street, London,
W1F 9NB. The webcast is available via the following link:
https://stream.buchanan.uk.com/broadcast/6504762150a62b392af14caa
(https://stream.buchanan.uk.com/broadcast/6504762150a62b392af14caa)
A replay will subsequently be available the same day via the same link.
boohoo group plc's results are available at www.boohooplc.com
(http://www.boohooplc.com) .
Enquiries
boohoo group plc
Shaun McCabe, Chief Financial Officer Tel: +44 (0)161 233 2050
Alistair Davies, Investor Relations Tel: +44 (0)161 233 2050
Mark Mochalski, Investor Relations Tel: +44 (0)20 3239 6289
Clara Melia, Investor Relations Tel: +44 (0)20 3289 5520
Zeus Capital - Nominated adviser and joint broker
Andrew Jones / Dan Bate / James Edis Tel: +44 (0)161 831 1512
Benjamin Robertson Tel: +44 (0)20 3829 5000
Jefferies - Joint broker
Ed Matthews / Harry Le May Tel: +44 (0)20 7029 8000
HSBC - Joint broker
Adam Miller / James Hopton Tel: +44 (0)20 7991 8888
Buchanan - Financial PR adviser boohoo@buchanan.uk.com
Richard Oldworth / Toto Berger / Verity Parker / Sophie Wills Tel: +44 (0)20 7466 5000
Notes:
Adjusted items, which are not statutory measures, show the underlying
performance of the group excluding large, non-cash and exceptional items.
(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 (loss)/profit before tax, interest,
amortisation of acquired intangible assets, share-based payment charges and
exceptional items.
(3) Adjusted profit before tax is calculated as profit before tax, excluding
amortisation of acquired intangible assets, share-based payment charges and
exceptional items.
(4) Adjusted (loss)/diluted earnings per share is calculated as diluted
earnings per share, adding back amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
(5) Net (debt)/cash is cash less borrowings, excluding lease liabilities.
(6) Core brands are defined as boohoo, boohooMAN, PrettyLittleThing, Karen
Millen and Debenhams marketplace
About boohoo group plc
"Leading the fashion eCommerce market"
Founded in Manchester in 2006, boohoo is an inclusive and innovative global
brand targeting young, value-orientated customers, pushing boundaries to bring
its customers up-to-date and inspirational fashion, 24/7.
In 2017, the group extended its customer offering through the acquisitions of
the vibrant fashion brand PrettyLittleThing and free-thinking brand Nasty Gal.
In March 2019, the group acquired the MissPap brand, in August 2019 the Karen
Millen and Coast brands and in June 2020 the Warehouse and Oasis brands, all
complementary to the group's scalable, multi-brand platform. In January 2021,
the group acquired the intellectual property assets of Debenhams, with the
goal of transforming a leading UK fashion and beauty retailer into a digital
department store and marketplace through a new capital-light and low-risk
operating model. In February 2021, the group acquired the intellectual
property assets of UK brands Dorothy Perkins, Wallis and Burton. As at 31
August 2023, the boohoo group had 17 million active customers 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
"aims", "anticipates", "believes", "continues", "could", "due", "estimates",
"expects", "goal", "intends", "may", "objectives", "outlook", "plans",
"potential", "probably", "project", "seeks", "should", "targets", or "will"
or, in each case, their negative or other variations or comparable
terminology.
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. Except as required by applicable law or regulation, 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 authorised under the Financial Services and Markets Act 2000 (as
amended). 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 revenues for the period declined by 17% (18% Constant Exchange Rate =
"CER") to £729.1 million from £882.4 million in 2022.
The Group's core brands, before factoring in the impact of Debenhams
marketplace commissions on statutory net revenue, declined 10% year on year,
consistent with prior guidance for Group revenues to decline by 10% to 15% in
the first half. This accounted for 8 percentage points of the Group's total
revenue decline. More significant declines in revenues however came from our
labels, following proactive actions taken to target more profitable sales.
This accounted for a further 8 percentage points of the Group's revenue
decline, but with much improved profitability. Strong GMV growth was achieved
within the Debenhams marketplace, with its increase as a proportion of Group
revenue accounting for 2 percentage points of the decline given the Group only
recognises commission income on marketplace sales.
UK revenues declined 19% reflecting the impact of the macro environment on
consumer demand, as well as price investments and the previously mentioned
increase of the Debenhams marketplace within the sales mix. International
revenues declined 15%, with extended delivery times continuing to impact our
customer proposition for most of the period and annualisation against strong
wholesale comparatives with new partners onboarded in the first half of the
prior financial year. The Group's US distribution centre went live in August
with its first brand, PrettyLittleThing, on time and on budget, as part of a
phased roll-out of brands into the site. This will transform the delivery
proposition for customers in a key strategic market, and for brands that are
operationally live, delivery times have improved by 3 days on average since
launch.
Gross product margin was 53.4%, up 90bps on the prior period (2022: 52.5%).
Adjusted EBITDA was £31.3 million (2022: £35.5 million), a decrease of 12%.
Adjusted EBITDA margin was 4.3%, up 30bps on the prior period (2022: 4.0%).
The improvement in adjusted EBITDA margin reflected strong improvements seen
across gross margins and distribution costs, which improved by 90bps and
150bps respectively year on year. The improvement in gross margin reflected
tighter inventory management and reduced input costs notwithstanding
significant investments made into freight and pricing. Distribution cost
savings were driven by significant efficiencies that have been unlocked from
the successful automation of our Sheffield distribution centre.
Other administrative costs reduced by 16% year on year, reflective of the
tight cost control measures implemented in the second half of the prior
financial year but increased by 40bps as a percentage of net sales given the
lower revenues reported in the first half of this financial year. Marketing
costs reduced by 4% as spend was optimised across marketing channels but
increased by 170bps as a percentage of sales. This reflects the impact of the
macro environment on consumer demand, targeted investments in specific growth
opportunities as well as underlying inflationary pressures across digital
marketing channels. This will be assessed going forwards through optimisation
of marketing channels to drive performance as well as brand activation
campaigns to drive higher levels of organic and direct traffic.
During the period, the Group incurred significant non-recurring costs, which
are shown as exceptional items in the financial statements and have not been
included in the adjusted performance measures. These items relate to set up
costs associated with the opening of the US distribution centre, and dual
running costs associated with the re-platforming of the Group's e-commerce
front end to its own in-house developed tech stacks. These exceptional items
amounted to £10.2 million and are detailed in note 1 of the financial
statements.
During the period the Group recognised a £10.2m gain on transition of its
investment in Revolution Beauty plc, which was previously accounted for as a
financial asset at fair value through other comprehensive income, as
irrevocably designated at the time of investment, in accordance with IFRS 9,
and is now classified as an investment in associate in accordance with IAS 28.
This gain was significant and non-recurring and has therefore not been
included in the adjusted performance measures. Further details are detailed in
note 1 and note 9 of the financial statements.
While trading conditions have remained challenging due to cost inflation,
uncertain consumer demand and normalisation of the channel shift online, the
Group has a strong business model and clear strategy with which it is focussed
on executing to unlock market share, which will allow it to build on its
existing strengths of:
· Test and repeat sourcing model that allows our brands to utilise our
diverse sourcing base with agility and flexibility whilst minimising excess
inventory risk
· Attractive brand portfolio that combines the latest trends with
outstanding value for consumers
· 17 million unique active customers and over 65 million followers
across social media
· A broad target addressable market of up to 500 million potential
customers in key global markets
· Well-invested infrastructure that offers best-in-class, efficient
logistics and a strong customer proposition with our first international
distribution centre now live, with significant capacity for future growth
· Strong balance sheet with significant liquidity headroom; and
· Numerous growth opportunities through our brands' direct-to-consumer
proposition, Debenhams and other routes to market, including strategic
partnerships with select partners globally
Key Performance Indicators
Active customer numbers in the last 12 months decreased by 12% to 17.0 million
reflecting the switch back to offline following the pandemic. Average order
frequency decreased by 7% from 3.21 to 2.98 times p.a. Average order value
decreased by 1% to £53.30 whilst the number of items per basket increased
slightly 2.95 to 2.98, driven by the capturing of deflation in our supply
chain and subsequent passing-through of cost savings to our customers.
Cash and Working Capital Management
Operating cash flow was £21.8 million (2022: £41.3 million). Working
capital, particularly in relation to inventory has been tightly managed.
Inventory has reduced significantly, down £94.2 million / 35% year on year.
Capital expenditure of £36.3 million included a substantial investment in
property and distribution centres of £18.3 million, mainly around Sheffield
automation and the opening of a warehousing facility in the USA. Net cash
outflow was £40.9 million (2022: £213.3 million inflow). Net debt at the
period-end increased to £35.0 million (2022: £10.4 million net debt), with
total liquidity of £290.0 million.
During the prior period the Group secured a new £325 million rolling capital
facility, increasing from the previous £100 million facility. The facility
remains fully drawn at the end of August 2023.
The Group will continue to make selective investments to support its platform
and brands, in line with its internal investment criteria and in a manner that
reflects the current macro-economic environment.
Performance by market
UK
The UK market continues to be the largest for the Group, accounting for 61% of
revenue (2022: 62%). Revenue was £441.3 million declining by 19% on 2022
reflecting the impact of the macro environment on consumer demand, as well as
price investments and increase of the Debenhams marketplace within the sales
mix. Gross margin improved from 50.2% to 51.6% and return rates have reduced
slightly, which is attributable to product mix and the capturing of deflation
in our supply chain and pass-through of lower prices to our consumers.
USA
USA revenues declined 11% on the prior year. Delivery times to the USA for
most of the period remained elevated compared to pre-pandemic levels, and this
has undoubtedly impacted demand. Successful go-live of the Group's US
distribution centre on time and on budget in August has transformed the
delivery proposition for US customers, and there will be a phased roll-out of
brands operating in the facility. Return rates have decreased year on year
reflecting brand mix. Gross margin reduced from 60.2% to 58.4% reflecting
brand mix as well as the impact of duties associated with the new distribution
centre.
Rest of Europe
Revenue in the rest of Europe decreased by 16% year on year, with performance
impacted by annualisation against strong wholesale comparatives with new
partners onboarded in the first half of the prior financial year. Gross margin
improved from 52.7% to 53.3% and return rates improved year on year.
Rest of world
Revenue in the rest of the world decreased by 23% on the prior year to £44.8
million (2022: £58.3 million) and was also impacted by annualisation against
strong wholesale comparatives with new partners onboarded in the first half of
the prior financial year. Gross margin improved from 50.8% to 53.3% with
return rates improving year on year.
Financial review
Group revenue by geographical market
6 months to 6 months to Change Change
31 August 31 August 2023
2023 2022 on 2022
£ million £ million CER((1))
UK 441.3 544.6 (19%) (19%)
Rest of Europe 85.8 102.1 (16%) (16%)
USA 157.2 177.4 (11%) (12%)
Rest of world 44.8 58.3 (23%) (25%)
729.1 882.4 (17%) (18%)
1. 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.
KPIs
Group
6 months to 6 months to Change
31 August 31 August 2023
2023 2022 on 2022
Active customers((1)) 17.0 million 19.2 million (12%)
Number of orders 23.2 million 28.3 million (18%)
Order frequency((2)) 2.98 3.21 (7%)
Conversion rate to sale ((3)) 3.39% 3.64% (7%)
Average order value((4)) £53.30 £53.85 (1%)
Number of items per basket 2.98 2.95 1%
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 website orders taken to internet
sessions
4. Calculated as gross sales including sales tax divided by the number
of orders
Consolidated summary income statement
6 months to 6 months to Change
31 August 31 August 2023
2023 2022 on 2022
£ million £ million
Revenue 729.1 882.4 (17%)
Cost of sales (339.9) (418.9) (19%)
Gross profit 389.2 463.5 (16%)
Gross margin % 53.4% 52.5% 90bps
Operating costs (358.0) (428.0) (16%)
Other income 0.1 -
Adjusted EBITDA 31.3 35.5 (12%)
Adjusted EBITDA margin % 4.3% 4.0% 30bps
Depreciation (24.0) (18.2)
Amortisation of other intangible assets (11.2) (7.7)
Adjusted EBIT (3.9) 9.6 (141%)
Adjusting items:
Amortisation of acquired intangible assets (6.1) (6.2)
Equity-settled share-based payments charges (11.2) (12.9)
Exceptional costs (10.2) (2.3)
Revaluation gain on transition of investment (IFRS 9) to associate (IAS 28) 10.2 -
Operating loss (21.2) (11.8) 80%
Finance income 6.0 0.5
Finance expense (11.2) (3.9)
Loss before tax (26.4) (15.2) 74%
Taxation 4.1 0.5
Loss after tax (22.3) (14.7) 52%
Share of results of associates - -
Loss for the period (22.3) (14.7) 52%
Loss per share (1.85)p (1.19)p 55%
Adjusted (loss)/profit after tax for the period (11.0) 3.8 (389%)
Amortisation of acquired intangible assets (6.1) (6.2)
Equity-settled share-based payments charges (11.2) (12.9)
Exceptional costs (10.2) (2.3)
Revaluation gain on transition of investment (IFRS 9) to associate (IAS 28) 10.2 -
Adjustment for tax 6.0 2.9
Loss after tax for the period (22.3) (14.7) 52%
Adjusted (loss)/profit for the period attributable to shareholders of the (11.0) 3.8
company
Adjusted (loss)/diluted earnings per share (0.91)p 0.29p (414%)
Exceptional costs 6 months to 6 months to
31 August 31 August
2023 2022
£ million £ million
Selling and distribution costs
USA warehouse set up costs 8.6 -
Sheffield automation disruption costs - 2.3
8.6 2.3
Administration expenses
Technology platform - dual running costs 1.6 -
1.6 -
Total before tax 10.2 2.3
Tax (2.5) (0.4)
Total after tax 7.7 1.9
Taxation
The Group recognised a tax credit of £4.1m (2022: £0.5m), an effective rate
of 15.5% (2022: 3.3%). This is lower than the tax credit calculated when
multiplying the loss before tax at the blended UK statutory rate of tax for
the period of 24.5% (2022: 19%), due to disallowable expenses and depreciation
of buildings in excess of capital allowances.
Loss per share
Loss per share for the first half of the year increased by 55% from (1.19)p to
(1.85)p. Adjusted diluted loss per share was (0.91)p, up 414% on the first
half of the prior year (2022: diluted earnings 0.29p).
Consolidated statement of financial position
6 months to 6 months to
31 August 31 August
2023 2022
£ million £ million
Intangible assets 128.6 131.4
Property, plant and equipment 374.3 358.8
Right-of-use assets 125.1 60.7
Financial assets 1.0 0.7
Equity investments 0.3 6.5
Investments in associates 26.5 -
Deferred tax asset 24.3 7.4
Non-current assets 680.1 565.5
Working capital (113.4) (22.7)
Lease liabilities (127.1) (62.7)
Net financial liabilities (2.3) (26.9)
Cash and cash equivalents 290.0 314.6
Interest bearing loans and borrowings (325.0) (325.0)
Deferred tax liability (22.6) (24.7)
Current tax asset - 6.5
Net assets 379.7 424.6
Liquidity and financial resources
Operating cash flow was £21.8 million (2022: £41.3 million). Net cash
outflow was £40.9 million (2022: £213.3 million inflow), following capital
expenditure of £36.3 million (2022: £38.7 million). During 2022 the Group
received a £225 million inflow from the newly committed £325 million
Revolving Credit Facility. Our net debt balance (cash less bank debt,
excluding lease liabilities) at the period end increased to £35.0 million
(2022: £10.4 million net debt). The closing cash balance for the Group was
£290.0 million.
Consolidated cash flow statement
6 months to 6 months to
31 August 31 August
2023 2022
£ million £ million
Loss for the period (22.3) (14.7)
Share-based payments charge 11.2 12.9
Depreciation charges, amortisation and impairment 41.3 32.1
Gain on sale of property, plant and equipment (0.1) -
Reclassification to profit or loss of discontinued hedge contracts (9.7) -
Revaluation gain on transition of investment to associate (10.2) -
Finance income (6.0) (0.5)
Finance expense 11.2 3.9
Tax expense (4.1) (0.5)
Decrease in inventories 2.6 9.7
Decrease/(increase) in trade and other receivables 6.0 (5.7)
Increase in trade and other payables 1.9 4.1
Operating cash flow 21.8 41.3
Capital expenditure and intangible asset purchases (36.3) (38.7)
Investments in equity instruments (1.3) (6.5)
Proceeds from the sale of property, plant and equipment 1.2 -
Tax refunded 1.7 1.2
Free cash outflow after tax (12.9) (2.7)
Net proceeds from the issue of ordinary shares 0.1 0.1
Purchase of own shares by EBT (15.4) -
Finance income received 5.3 0.4
Finance expense paid (9.4) (3.4)
Lease payments (8.6) (6.1)
Increase in borrowings - 225.0
Net cash (out)/inflow (40.9) 213.3
Cash and cash equivalents at beginning of period 330.9 101.3
Cash and cash equivalents at end of period 290.0 314.6
Outlook and Guidance
The Group's focus remains on executing its back to growth strategy through
disciplined investments across product, price and proposition. Given the
slower volume recovery than previously anticipated and the continued targeting
of more profitable sales within our labels, revenues for the year ending 28
February 2024 ("FY24") are now expected to decline by 12% to 17%.
In line with prior guidance, adjusted EBITDA margins are expected to be
between 4% and 4.5% given the strong progress made on gross margin and cost
control. Adjusted EBITDA is expected to be between £58 million to £70
million. Capital expenditure is expected to be approximately £75 million.
The Group's back to growth strategy will unlock the significant growth
opportunity. The Board's confidence remains unchanged in rebuilding
profitability over the medium term, generating a 6% to 8% adjusted EBITDA
margin while getting back to growth through: continued investment in product,
price and proposition, volume growth, international expansion, unlocking cost
deflation; and cost control.
John Lyttle Shaun McCabe
Chief Executive Officer Chief Financial Officer
3 October 2023
Unaudited consolidated statement of comprehensive income
for the period ended 31 August 2023
Note 6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
(unaudited) (unaudited) (audited)
£ million £ million £ million
Revenue 3 729.1 882.4 1,768.7
Cost of sales (339.9) (418.9) (873.5)
Gross profit 389.2 463.5 895.2
Distribution costs (189.9) (224.8) (447.9)
Exceptional costs (8.6) (2.3) (20.0)
Other distribution costs (181.3) (222.5) (427.9)
Administrative expenses (230.8) (250.5) (529.7)
Amortisation of acquired intangibles (6.1) (6.2) (12.2)
Exceptional expenses (1.6) - (24.9)
Other administrative expenses (223.1) (244.3) (492.6)
Other income 0.1 - 0.2
Revaluation gain on transition of investment (IFRS 9) to associate (IAS 28) 10.2 - -
Operating loss (21.2) (11.8) (82.2)
Finance income 6.0 0.5 3.5
Finance expense (11.2) (3.9) (12.0)
Loss before tax 4 (26.4) (15.2) (90.7)
Taxation 4.1 0.5 15.1
Loss after tax (22.3) (14.7) (75.6)
Share of results of associates 9 - - -
Loss for the period (22.3) (14.7) (75.6)
Other comprehensive (expense)/income for the period
(Gain)/loss reclassified to profit or loss during the period ((1)) (1.4) (1.1) 16.2
Fair value gain/(loss) on cash flow hedges during the period ((1)) 7.1 (35.2) (28.7)
Income tax relating to these items (1.4) 6.9 2.4
Total comprehensive loss for the period (18.0) (44.1) (85.7)
Earnings per share 5
Basic (1.85)p (1.19)p (6.13)p
Diluted (1.85)p (1.19)p (6.13)p
1. Net fair value gains/losses on cash flow hedges will be
reclassified to profit or loss during the three years to 31 August 2026.
Unaudited consolidated statement of financial position
at 31 August 2023
Note At At At
31 August 31 August 28 February
2023 2022 2023
(unaudited) (unaudited) (audited)
£ million £ million £ million
Assets
Non-current assets
Intangible assets 6 128.6 131.4 131.5
Property, plant and equipment 7 374.3 358.8 371.6
Right-of-use assets 8 125.1 60.7 136.4
Financial assets 19 1.0 0.7 0.3
Financial assets - equity investments 19 0.3 6.5 15.3
Investments in associates 9 26.5 - -
Deferred tax 10 24.3 7.4 23.5
Total non-current assets 680.1 565.5 678.6
Current assets
Inventories 175.5 269.7 178.1
Trade and other receivables 11 32.9 61.6 37.0
Financial assets 18 3.4 12.0 1.1
Current tax asset - 6.5 -
Cash and cash equivalents 290.0 314.6 330.9
Total current assets 501.8 664.4 547.1
Total assets 1,181.9 1,229.9 1,225.7
Liabilities
Current liabilities
Trade and other payables 12 (272.3) (291.5) (260.3)
Provisions 13 (40.1) (62.5) (49.7)
Lease liabilities 15 (11.1) (8.1) (12.1)
Financial liabilities 19 (5.4) (27.7) (15.7)
Total current liabilities (328.9) (389.8) (337.8)
Non-current liabilities
Provisions 13 (9.4) - (10.0)
Interest bearing loans and borrowings 14 (325.0) (325.0) (325.0)
Lease liabilities 15 (116.0) (54.6) (126.5)
Financial liabilities 19 (0.3) (11.2) (2.2)
Deferred tax 10 (22.6) (24.7) (24.2)
Total liabilities (802.2) (805.3) (825.7)
Net assets 379.7 424.6 400.0
Equity
Share capital 16 12.7 12.7 12.7
Shares to be issued 17 31.9 31.9 31.9
Share premium 911.2 922.9 916.8
Hedging reserve 3.4 (26.1) (2.3)
EBT reserve (86.5) (75.6) (76.8)
Other reserves 18 (796.1) (797.1) (796.5)
Retained earnings 303.1 355.9 314.2
Total equity 379.7 424.6 400.0
Unaudited consolidated statement of changes in equity
Share Shares to Share premium Hedging reserve EBT Other reserves Retained earnings Total equity
capital be issued reserve
£ million £ million £ million £ million £ million £ million £ million £ million
Balance at 28 February 2023 12.7 31.9 916.8 (2.3) (76.8) (796.5) 314.2 400.0
Loss for the period - - - - - - (22.3) (22.3)
Other comprehensive income/(expense):
Gain reclassified to profit and loss in revenue - - - (1.4) - - - (1.4)
Fair value gain on cash flow hedges during the period - - - 7.1 - - - 7.1
Total comprehensive expense for the period - - - 5.7 - - (22.3) (16.6)
Issue of shares - - (5.6) - (9.7) - - (15.3)
Share-based payments credit - - - - - - 11.2 11.2
Translation of foreign operations - - - - - 0.4 - 0.4
Balance at 31 August 2023 12.7 31.9 911.2 3.4 (86.5) (796.1) 303.1 379.7
Share Shares to Share premium Hedging reserve EBT Other reserves Retained earnings Total equity
capital be issued reserve
£ million £ million £ million £ million £ million £ million £ million £ million
Balance at 28 February 2022 12.7 31.9 922.8 10.2 (75.6) (795.5) 357.8 464.3
Loss for the period - - - - - - (14.7) (14.7)
Other comprehensive income/(expense):
Gain reclassified to profit and loss in revenue - - - (1.1) - - - (1.1)
Fair value loss on cash flow hedges during the period - - - (35.2) - - - (35.2)
Total comprehensive expense for the period - - - (36.3) - - (14.7) (51.0)
Issue of shares - - 0.1 - - - - 0.1
Share-based payments credit - - - - - - 12.9 12.9
Excess taxation on share-based payments - - - - - - (0.1) (0.1)
Translation of foreign operations - - - - - (1.6) - (1.6)
Balance at 31 August 2022 12.7 31.9 922.9 (26.1) (75.6) (797.1) 355.9 424.6
Share Shares to Share premium Hedging reserve EBT Other reserves Retained earnings Total equity
capital be issued reserve
£ million £ million £ million £ million £ million £ million £ million £ million
Balance at 28 February 2022 12.7 31.9 922.8 10.2 (75.6) (795.5) 357.8 464.3
Loss for the year - - - - - - (75.6) (75.6)
Other comprehensive income/(expense):
Loss reclassified to profit or loss in exceptional items (note 1) - - - 14.3 - - - 14.3
Loss reclassified to profit or loss in revenue - - - 1.9 - - - 1.9
Fair value loss on cash flow hedges during the year - - - (28.7) - - - (28.7)
Total comprehensive expense for the year - - - (12.5) - - (75.6) (88.1)
Issue of shares - - (6.0) - (1.2) - - (7.2)
Share-based payments credit - - - - - - 32.0 32.0
Translation of foreign operations - - - - - (1.0) - (1.0)
Balance at 28 February 2023 12.7 31.9 916.8 (2.3) (76.8) (796.5) 314.2 400.0
Unaudited consolidated cash flow statement
for the period ended 31 August 2023
Note 6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
(unaudited) (unaudited) (audited)
£ million £ million £ million
Cash flows from operating activities
Loss for the period (22.3) (14.7) (75.6)
Adjustments for:
Share-based payments charge 11.2 12.9 32.0
Depreciation charges, amortisation and impairment 41.3 32.1 82.0
Gain on sale of property, plant and equipment (0.1) - -
Reclassification to profit or loss of discontinued hedge contracts (9.7) - 14.3
Revaluation gain on transition of investment (IFRS 9) to associate (IAS 28) (10.2) - -
Share of results of associates 9 - - -
Finance income (6.0) (0.5) (3.5)
Finance expense 11.2 3.9 12.0
Tax credit (4.1) (0.5) (15.1)
11.3 33.2 46.1
Decrease in inventories 2.6 9.7 101.3
Decrease/(increase) in trade and other receivables 11 6.0 (5.7) 19.4
Increase in trade and other payables 12 1.9 4.1 (35.9)
Cash generated from operations 21.8 41.3 130.9
Tax repaid 1.7 1.2 5.8
Net cash generated from operating activities 23.5 42.5 136.7
Cash flows from investing activities
Acquisition of intangible assets 6 (14.4) (16.8) (32.1)
Acquisition of property, plant and equipment 7 (21.9) (22.4) (59.1)
Proceeds from the sale of property, plant and equipment 1.2 0.5 0.5
Acquisition of financial assets - equity investments (1.3) (6.5) (15.3)
Finance income received 5.3 0.4 2.7
Net cash used in investing activities (31.1) (44.8) (103.3)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 0.1 0.1 0.2
Purchase of own shares by EBT (15.4) - (7.4)
Finance expense paid (9.4) (3.4) (9.6)
Lease payments 15 (8.6) (6.1) (12.0)
Increase in borrowings 14 - 225.0 225.0
Net cash (used in)/generated from financing activities (33.3) 215.6 196.2
(Decrease)/increase in cash and cash equivalents (40.9) 213.3 229.6
Cash and cash equivalents at beginning of period 330.9 101.3 101.3
Cash and cash equivalents at end of period 290.0 314.6 330.9
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 to 31 August
2023 have been prepared in accordance with IAS 34, "Interim Financial
Reporting" as adopted by the UK. The interim financial statements should be
read in conjunction with the group's Annual Report and Financial Statements
for the year ended 28 February 2023, prepared and approved by the directors in
accordance with UK-adopted international accounting standards 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 Financial Statements for
the year ended 28 February 2023 has been filed with the Jersey Companies
Registry. The auditors' report 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 3 October 2023.
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 Financial
Statements for the year ended 28 February 2023, with the addition of the
following new accounting policies:
Investments in associates
An associate is an entity over which the group has significant influence and
that is neither a subsidiary nor an interest in a joint venture. Significant
influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those
policies. Whereas joint ventures are entities over which the group has joint
control over such policies.
The group's share of the results of associates is included in the group income
statement and group statement of comprehensive income using the equity method
of accounting. Investments in associates are carried in the group balance
sheet at cost plus post-acquisition changes in the group's share of the net
assets of the entity, less any dividends received and impairment in value. If
the group's share of losses in an associate equals or exceeds its investment
in the associate, the group does not recognise further losses, unless it has
incurred obligations to do so or made payments on behalf of the associate.
Dividends received from associates with nil carrying value are recognised in
the group income statement as part of the group's share of post-tax
profits/(losses) of associates. Unrealised gains arising from transactions
with associates are eliminated to the extent of the group's interest in the
entity.
Significant estimates and judgements
The preparation of financial statements in conformity with IFRS as adopted by
the UK requires management to make judgements, estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities. The estimates and assumptions are based on
historical experience and various other factors believed to be reasonable
under the circumstances. Actual results could differ from these estimates and
any subsequent changes are accounted for when such information becomes
available. The judgements, estimates and assumptions that are the most
subjective or complex are discussed below and are unchanged from those at 28
February 2023 with the exception of the classification and fair value of the
investment in equity instruments:
Classification and fair value of investments in equity instruments
During the year to 28 February 2023 26.47% of the issued share capital of
Revolution Beauty Group plc ("REVB") was acquired. The equity accounting
requirements of IAS 28 (Investments in associates and joint ventures) were
considered and it was determined that significant influence did not exist
either at the time of initial recognition or as at 28 February 2023. The
equity investment was accounted for as a financial asset under IFRS 9 with the
option taken to hold at fair value through other comprehensive income, as
irrevocably designated at the date of recognition.
On 18(th) July 2023 the group entered into a settlement agreement with REVB
resulting in the reconstitution of the REVB board. The group also increased
it's shareholding in REVB to 27.13%. The equity accounting requirements of IAS
28 were reconsidered and it was determined that significant influence did
exist as a result of the settlement agreement, reconstitution of the REVB
board and change in ownership percentage. As a result the investment has been
accounted for as an associate under IAS 28 from 18(th) July 2023. The
investment, which was previously accounted for under IFRS 9, was derecognised
and the cumulative gain recognised in other comprehensive income of £10.2m
was reclassified to profit or loss as a revaluation adjustment.
Under the equity accounting requirements of IAS 28 the group's share of the
results of associates is included in the carrying value of the associate in
the group statement of financial position and included within the group income
statement and group statement of comprehensive income using the equity method
of accounting. As at the date of publishing these interim condensed financial
statements the group's share of REVB's results for the period 18(th) July 2023
to 31 August 2023 is unavailable. The group has considered the results for the
year ending 28 February 2023 and the forward looking guidance published by
REVB in their RNS dated 31 August 2023 and an estimate of £nil has been
disclosed in the group statement of financial position, the group income
statement and group statement of comprehensive income. Given the group's
shareholding percentage and the short period of time prior to the period end
that REVB has been classified as an associate the risk of this estimate being
materially incorrect is considered remote.
Exceptional items
Exceptional items are those of significant size and of a non-recurring nature
that require disclosure in order that the underlying business performance can
be identified. The exceptional costs in these interim statements include
additional costs associated with the opening of a warehousing facility in the
USA and onerous. Such additional costs do require estimation by management.
Exceptional costs 6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Selling and distribution costs
USA warehouse set up costs 8.6 - 2.4
Sheffield automation disruption costs - 2.3 8.3
Impairment of UK warehouse property, plant and equipment - - 3.3
Impairment of UK warehouse right-of-use asset - - 3.6
UK warehouse restructuring and dual operating costs - - 2.4
8.6 2.3 20.0
Administration expenses
Technology platform - dual running costs 1.6 - -
Reclassification to profit or loss of discontinued hedge contracts - - 14.3
Impairment of property, plant and equipment at loss-making operations - - 6.5
Redundancy costs - - 4.1
1.6 - 24.9
Total before tax 10.2 2.3 44.9
Tax (2.5) (0.4) (8.5)
Total after tax 7.7 1.9 36.4
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
2024 to be unchanged from those set out in the group's Annual Report and
Financial Statements for the year ended 28 February 2023, which in summary
are: supply chain ethics, competition risk; sustainability, governance, ethos
and culture, regulatory compliance, taxation and duties, supply chain costs,
IT and cyber security, business change, third parties, business continuity,
people, product and financial risk. These are set out in detail on pages 29 to
38 of the group's Annual Report and Financial Statements for the year ended 28
February 2023, a copy of which is available on the group's website,
www.boohooplc.com.
3 Segmental analysis
6 months ended 31 August 2023
UK Rest of USA Rest of Total
Europe world
£ million £ million £ million £ million £ million
Revenue 441.3 85.8 157.2 44.8 729.1
Cost of sales (213.5) (40.1) (65.4) (20.9) (339.9)
Gross profit 227.8 45.7 91.8 23.9 389.2
Distribution costs - - - - (189.9)
Administrative expenses - other - - - - (224.7)
Amortisation of acquired intangibles - - - - (6.1)
Other income - - - - 10.3
Operating loss - - - - (21.2)
Finance income - - - - 6.0
Finance expense - - - - (11.2)
Loss before tax - - - - (26.4)
6 months ended 31 August 2022
UK Rest of USA Rest of Total
Europe world
£ million £ million £ million £ million £ million
Revenue 544.6 102.1 177.4 58.3 882.4
Cost of sales (271.3) (48.3) (70.6) (28.7) (418.9)
Gross profit 273.3 53.8 106.8 29.6 463.5
Distribution costs - - - - (224.8)
Administrative expenses - other - - - - (244.3)
Amortisation of acquired intangibles - - - - (6.2)
Other income - - - - -
Operating loss - - - - (11.8)
Finance income - - - - 0.5
Finance expense - - - - (3.9)
Loss before tax - - - - (15.2)
Year ended 28 February 2023
UK Rest of USA Rest of Total
Europe world
£ million £ million £ million £ million £ million
Revenue 1,091.5 206.5 363.7 107.0 1,768.7
Cost of sales (569.1) (99.1) (152.6) (52.7) (873.5)
Gross profit 522.4 107.4 211.1 54.3 895.2
Distribution costs - - - - (447.9)
Administrative expenses - other - - - - (517.5)
Amortisation of acquired intangibles - - - - (12.2)
Other income - - - - 0.2
Operating loss - - - - (82.2)
Finance income - - - - 3.5
Finance expense - - - - (12.0)
Loss before tax - - - - (90.7)
IFRS 8, 'Operating Segments', requires operating segments to be determined
based on the group's internal reporting to the chief operating decision maker.
The chief operating decision maker is considered to be the executive board,
which has determined that the primary segmental reporting format of the group
for the year ending 28 February 2024 is by geographic region.
4 Loss before tax
Loss before tax is stated after charging: 6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Short-term operating lease rentals for buildings 0.1 - 0.1
Equity-settled share-based payment charges 11.2 12.9 32.0
Exceptional costs, excluding impairment (note 1) 10.2 2.3 31.5
Depreciation of property, plant and equipment (note 7) 17.0 12.7 26.7
Impairment of property, plant and equipment (note 1) - - 9.8
Depreciation of right-of-use assets (note 8) 7.0 5.5 12.8
Impairment of right-of-use assets (note 1) - - 3.6
Amortisation of intangible assets (note 6) 11.2 7.7 16.9
Amortisation of acquired intangible assets (note 6) 6.1 6.2 12.2
5 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 period. 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 period, adjusted for potentially dilutive share options.
6 months to 6 months to Year to
31 August 31 August 28 February 2023
2023 2022
Weighted average shares in issue for basic earnings per share (million) 1,202.4 1,239.7 1,233.0
Dilutive share options (million) 102.3 60.9 69.4
Weighted average shares in issue for diluted earnings per share (million) 1,304.7 1,300.6 1,302.4
Loss (£ million) (22.3) (14.7) (75.6)
Loss per share (1.85)p (1.19)p (6.13)p
Loss (£ million) (22.3) (14.7) (75.6)
Adjusting items:
Amortisation of intangible assets arising on acquisitions 6.1 6.2 12.2
Share-based payments charges 11.2 12.9 32.0
Exceptional items 10.2 2.3 31.5
Impairment of assets - - 13.4
Revaluation gain on transition of investment (IFRS 9) to associate (IAS 28) (10.2) - -
Adjustment for tax (6.0) (2.9) (13.7)
Adjusted (loss)/earnings (11.0) 3.8 (0.2)
Adjusted (loss)/basic earnings per share (0.91)p 0.31p (0.02)p
Adjusted (loss)/diluted earnings per share (0.91)p 0.29p (0.02)p
6 Intangible assets
Patents and licences Trademarks Customer lists Computer software Total
£ million £ million £ million £ million £ million
Cost
Balance at 28 February 2023 1.0 115.6 8.1 83.2 207.9
Additions 0.1 - - 14.3 14.4
Balance at 31 August 2023 1.1 115.6 8.1 97.5 222.3
Accumulated amortisation
Balance at 28 February 2023 0.6 37.5 7.5 30.8 76.4
Amortisation - 5.8 0.3 11.2 17.3
Balance at 31 August 2023 0.6 43.3 7.8 42.0 93.7
Net book value
At 28 February 2023 0.4 78.1 0.6 52.4 131.5
At 31 August 2023 0.5 72.3 0.3 55.5 128.6
7 Property, plant and equipment
Short leasehold alterations Fixtures and fittings Computer equipment Motor vehicles Land & buildings Total
£ £ million £ £ million £ £ million
million million million
Cost
Balance at 28 February 2023 31.8 279.3 14.8 1.0 136.1 463.0
Additions 2.2 19.2 0.5 - - 21.9
Exchange differences - (1.1) - - - (1.1)
Disposals - - - (0.1) (1.2) (1.3)
Balance at 31 August 2023 34.0 297.4 15.3 0.9 134.9 482.5
Accumulated depreciation
Balance at 28 February 2023 10.3 62.6 9.5 0.8 8.2 91.4
Depreciation charge 1.4 12.5 1.7 - 1.4 17.0
Exchange differences - - - - - -
Disposals - - - (0.1) (0.1) (0.2)
Balance at 31 August 2023 11.7 75.1 11.2 0.7 9.5 108.2
Net book value
At 28 February 2023 21.5 216.7 5.3 0.2 127.9 371.6
At 31 August 2023 22.3 222.3 4.1 0.2 125.4 374.3
8 Right-of-use assets
Short leasehold properties
£ million
Cost
Balance at 28 February 2023 181.0
Additions 2.1
Exchange differences (6.3)
Balance at 31 August 2023 176.8
Accumulated depreciation
Balance at 28 February 2023 44.6
Depreciation 7.0
Exchange differences 0.1
Balance at 31 August 2023 51.7
Net book value
At 28 February 2023 136.4
At 31 August 2023 125.1
9 Associates
Interest in associates
£ million
Cost
Balance at 28 February 2023 -
Additions at fair value 26.5
Retained profit / accumulated loss -
Balance at 31 August 2023 26.5
Impairment
Balance at 28 February 2023 -
Impairment charge -
Balance at 31 August 2023 -
Net book value
At 28 February 2023 -
At 31 August 2023 26.5
Under the equity accounting requirements of IAS 28 the group's share of the
results of associates is included in the carrying value of the associate in
the group statement of financial position and included within the group income
statement and group statement of comprehensive income using the equity method
of accounting. As at the date of publishing these interim condensed financial
statements the group's share of REVB's results for the period 18(th) July 2023
to 31 August 2023 is unavailable. The group has considered the results for the
year ending 28 February 2023 and the forward looking guidance published by
REVB in their RNS dated 31 August 2023 and an estimate of £nil has been
disclosed in the group statement of financial position, the group income
statement and group statement of comprehensive income. Given the group's
shareholding percentage and the short period of time prior to the period end
that REVB has been classified as an associate the risk of this estimate being
materially incorrect is considered remote.
Set out below are the material associates of the group. The entities listed
below have share capital consisting of ordinary shares, which are held
directly by the group. The country of incorporation or registration is their
principal place of business, and the proportion of ownership interest is the
same as the proportion of voting rights held.
% ownership Carrying amount
Name of entity 31 August 31 August 31 August 31 August
2023 2022 2023 2022
% % £ million £ million
Revolution Beauty Group plc 27.13% - 26.5 -
At 31 August 2022 the group held 12.85% of REVB's ordinary share capital and
this was recognised in the group statement of financial position as an
investment at fair value of £6.5 million. As this was classified as an
investment in the prior period rather than an associate it is therefore not
included in the table above.
10 Deferred tax
Assets
Unused Depreciation in excess of capital allowances Share-based payments Total
tax losses
£ million £ million £ million £ million
At 28 February 2022 7.5 - - 7.5
Recognised in statement of comprehensive income (0.1) - - (0.1)
At 31 August 2022 7.4 - - 7.4
At 28 February 2023 22.5 - 1.0 23.5
Recognised in statement of comprehensive income (0.9) - 1.7 0.8
At 31 August 2023 21.6 - 2.7 24.3
Liabilities
Business combinations Capital allowances in excess of depreciation Share-based payments Total
£ million £ million £ million £ million
At 28 February 2022 (0.8) (22.5) (2.0) (25.3)
Recognised in statement of comprehensive income 0.1 (0.8) 1.4 0.7
Debit in equity - - (0.1) (0.1)
At 31 August 2022 (0.7) (23.3) (0.7) (24.7)
At 28 February 2023 (0.7) (23.5) - (24.2)
Recognised in statement of comprehensive income 0.1 1.5 - 1.6
At 31 August 2023 (0.6) (22.0) - (22.6)
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. Deferred tax
is calculated at 25% as enacted from April 2023 by the UK Government.
11 Trade and other receivables
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Trade receivables 13.3 33.9 17.6
Prepayments 16.9 24.1 13.9
Accrued income 2.7 3.6 5.5
32.9 61.6 37.0
Where specific trade receivables are not considered to be at risk and
requiring a provision, the trade receivables impairment provision is
calculated using the simplified approach to the expected credit loss model,
based on the following percentages:
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
Age of trade receivable % % %
60 - 90 days past due 1 1 1
91 - 120 days past due 5 5 5
Over 121 days past due 90 90 90
Trade receivables represent amounts due from wholesale customers and advance
payments to suppliers.
The fair value of trade and other receivables is not materially different from
the carrying value.
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Due within 30 days 11.9 26.3 16.0
Provision for impairment (1.6) (0.1) -
Due in 31 to 90 days 2.7 8.7 4.3
Provision for impairment (1.7) (2.4) (2.8)
Past due 2.0 1.4 0.1
Total amounts due and past due 16.6 36.4 20.4
Total provision for impairment (3.3) (2.5) (2.8)
13.3 33.9 17.6
12 Trade and other payables
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Trade payables 80.3 85.2 82.0
Other creditors 16.0 8.4 17.0
Accruals 147.5 153.6 125.6
Deferred income 11.3 19.3 15.9
Taxes and social security payable 17.2 25.0 19.8
272.3 291.5 260.3
13 Provisions
Dilapidations Returns Claims Total
£ million £ million £ million £ million
Provision at 28 February 2022 3.7 32.0 17.8 53.5
Movements in provision charged/(credited) to income statement:
Prior year provision utilised - (32.0) (0.7) (32.7)
Increase in provision in period - 41.7 - 41.7
Provision at 31 August 2022 3.7 41.7 17.1 62.5
Provision at 28 February 2023 10.0 37.6 12.1 59.7
Movements in provision charged/(credited) to income statement:
Prior year provision utilised (0.1) (37.6) (2.9) (40.6)
Increase in provision period - 30.9 - 30.9
Exchange differences (0.5) - - (0.5)
Provision at 31 August 2023 9.4 30.9 9.2 49.5
14 Interest-bearing loans and borrowings
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Non-current liabilities
Revolving credit facility 325.0 325.0 325.0
The RCF is unsecured against the company's assets and includes financial
covenants relating to interest cover and adjusted leverage.
Movement in interest-bearing loans and borrowings
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Opening balance 325.0 100.0 100.0
Drawdown on rolling credit facility - 225.0 225.0
Interest accrued 9.4 3.5 9.6
Interest paid (9.4) (3.5) (9.6)
Capital paid - - -
Closing balance 325.0 325.0 325.0
Reconciliation of movements in cash flows from financing activities to
movements in liabilities:
Balance at Cash flow from financing activities Additions, disposals and exchange differences Statement of comprehensive income Movement in retained earnings and other reserves Balance at 31 August 2023
28 February 2023
£ million £ million £ million £ million £ million £ million
Equity 400.0 (15.3) - (16.6) 11.6 379.7
Leases 138.6 (8.6) (4.1) 1.2 - 127.1
Bank borrowings 325.0 (9.4) - 9.4 - 325.0
863.6 (33.3) (4.1) (6.0) 11.6 831.8
Reconciliation of net debt:
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Cash and cash equivalents 290.0 314.6 330.9
Interest bearing loans and borrowings (325.0) (325.0) (325.0)
Net (debt) / cash and cash equivalents (35.0) (10.4) 5.9
15 Lease liabilities
Minimum lease payments due Within 1 year 1-2 years 2-5 years 5-10 years More than 10 years Total
£ million £ million £ million £ million £ million £ million
31 August 2023
Lease payments 13.7 11.6 36.4 51.2 31.7 144.6
Finance charges (2.6) (2.4) (5.6) (5.4) (1.5) (17.5)
Net present value 11.1 9.2 30.8 45.8 30.2 127.1
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Current lease liability 11.1 8.1 12.1
Non-current lease liability 116.0 54.6 126.5
Total 127.1 62.7 138.6
Movement in lease liabilities:
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Opening balance 138.6 51.9 51.9
Interest accrued 1.2 0.4 1.7
Cash flow lease payments (8.6) (6.1) (12.0)
Additions 2.1 16.5 97.0
Exchange differences (6.2) - -
Closing balance 127.1 62.7 138.6
The lease liabilities relate to leasehold properties.
16 Share capital
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
At start of period 12.7 12.7 12.7
Share issues - - -
At end of period 12.7 12.7 12.7
Share capital at period end: 1,268,433,263 authorised and fully paid ordinary
shares of 1p each (2022: 1,268,186,789). No dividends have been paid or are
payable by the parent company for the period ended 31 August 2022 (2022:
£nil).
17 Shares to be issued
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
31.9 31.9 31.9
The shares to be issued represents the fair value of the contingent shares to
be issued to the non-controlling interests of PrettyLittleThing.com Limited,
in accordance with the acquisition agreement entered into and announced on 28
May 2020. Under this agreement, 16,112,331 Ordinary Shares in boohoo group plc
are to be issued subject to the group's share price averaging 491 pence per
share over a six-month period, up until a longstop date of 14 March 2024. If
this condition is not met, the consideration will lapse.
18 Reserves
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Translation reserve (0.4) (1.4) (0.8)
Capital redemption reserve 0.1 0.1 0.1
Reconstruction reserve (515.3) (515.3) (515.3)
Acquisition of non-controlling interest in PrettyLittleThing.com Limited (281.3) (281.3) (281.3)
Proceeds from issue of growth shares in boohoo holdings Limited 0.8 0.8 0.8
(796.1) (797.1) (796.5)
The translation reserve arises from the movement in the revaluation of
subsidiary balance sheets in foreign currencies; the capital redemption
reserve arose from a capital reconstruction in 2014; the reconstruction
reserve arose on the impairment of the carrying value of the subsidiary
company in 2014 at that date; and the acquisition of the non-controlling
interest in PrettyLittleThing is the excess of consideration paid over the
carrying value of the non-controlling interest as at the date of acquisition
in May 2020, written off to reserves.
19 Financial instruments
Fair values
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Financial assets
At amortised cost:
Cash and cash equivalents 290.0 314.6 330.9
Trade receivables 13.3 33.9 17.6
Accrued income 2.7 3.6 5.5
At fair value through profit or loss:
Cash flow hedges 0.9 - 0.2
At fair value through other comprehensive income:
Cash flow hedges 3.5 12.7 1.2
Equity investments 0.3 6.5 15.3
310.7 371.3 370.7
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Financial liabilities
At amortised cost:
Trade payables 80.3 85.2 82.0
Other creditors 16.0 8.4 17.0
Accruals 147.5 153.6 125.6
Provisions 49.5 62.5 59.7
Interest-bearing loans and borrowings 325.0 325.0 325.0
Lease liabilities 127.1 62.7 138.6
At fair value through profit or loss:
Cash flow hedges 5.5 - 14.5
At fair value through other comprehensive income:
Cash flow hedges 0.2 38.9 3.4
751.1 736.3 765.8
20 Capital commitments
Capital expenditure contracted for at the end of the reporting period but not
yet incurred is as follows:
6 months to 6 months to Year to
31 August 31 August 28 February
2023 2022 2023
£ million £ million £ million
Property, plant and equipment 6.5 25.5 17.0
The capital commitment relates to automation equipment in the Sheffield
warehouse and fixtures and fittings at the US warehousing facility in
Pennsylvania.
21 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 2023, there are no contingent liabilities, which in the
opinion of the directors are expected to have a material adverse effect on its
liquidity or operations.
Appendices
Growth rates on prior period revenue by region
Revenue by period for the 6 months to 31 August 2023 (FY24)
£m 3m to 31 May 3m to 31 August 6m to 31 August
FY24 FY23 yoy % yoy % CER FY24 FY23 yoy % yoy % FY24 FY23 yoy % yoy %
CER CER
Total 370.1 445.7 -17% -17% 359.0 436.7 -18% -18% 729.1 882.4 -17% -18%
Revenue by region
UK 221.2 272.1 -19% -19% 220.1 272.5 -19% -19% 441.3 544.6 -19% -19%
ROE 43.4 49.6 -12% -14% 42.4 52.5 -19% -18% 85.8 102.1 -16% -16%
USA 81.8 95.0 -14% -14% 75.4 82.4 -8% -9% 157.2 177.4 -11% -12%
ROW 23.7 29.0 -18% -23% 21.1 29.3 -28% -28% 44.8 58.3 -23% -25%
Revenue by period for the 6 months to 31 August 2022 (FY23)
£m 3m to 31 May 3m to 31 August 6m to 31 August
FY23 FY22 yoy % yoy % CER FY23 FY22 yoy % yoy % FY23 FY22 yoy % yoy %
CER CER
Total 445.7 486.0 -8% -10% 436.7 489.8 -11% -13% 882.4 975.8 -10% -11%
Revenue by region
UK 272.1 274.5 -1% -1% 272.5 294.9 -8% -8% 544.6 569.4 -4% -4%
ROE 49.6 54.4 -9% -10% 52.5 50.0 5% 2% 102.1 104.4 -2% -4%
USA 95.0 131.9 -28% -31% 82.4 118.6 -31% -35% 177.4 250.5 -29% -33%
ROW 29.0 25.2 15% 10% 29.3 26.3 11% 5% 58.3 51.5 13% 8%
Revenue by period for the year to 28 February 2023 (FY23)
£m 4m to 31 December 2m to 28 February 12m to 28 February
FY23 FY22 yoy % yoy % CER FY23 FY22 yoy % yoy % FY23 FY22 yoy % yoy %
CER CER
Total 637.7 714.5 -11% -13% 248.6 292.4 -15% -17% 1,768.7 1,982.8 -11% -13%
Revenue by region
UK 400.8 451.0 -11% -11% 146.1 182.4 -20% -20% 1,091.5 1,202.8 -9% -9%
ROE 73.5 79.9 -8% -11% 30.9 34.9 -11% -14% 206.5 219.2 -6% -8%
USA 128.9 145.8 -12% -17% 57.4 55.3 4% -3% 363.7 451.6 -19% -24%
ROW 34.5 37.8 -9% -15% 14.2 19.9 -28% -36% 107.0 109.2 -2% -8%
£m 3m to 31 May 3m to 31 August 6m to 31 August
FY23 FY22 yoy % yoy % CER FY23 FY22 yoy % yoy % FY23 FY22 yoy % yoy %
CER CER
Total 445.7 486.0 -8% -10% 436.7 489.8 -11% -13% 882.4 975.8 -10% -11%
Revenue by region
UK 272.1 274.5 -1% -1% 272.5 294.9 -8% -8% 544.6 569.4 -4% -4%
ROE 49.6 54.4 -9% -10% 52.5 50.0 5% 2% 102.1 104.4 -2% -4%
USA 95.0 131.9 -28% -31% 82.4 118.6 -31% -35% 177.4 250.5 -29% -33%
ROW 29.0 25.2 15% 10% 29.3 26.3 11% 5% 58.3 51.5 13% 8%
CER in this appendix for the period ended 31 August 2022 is calculated using
exchange rates prevailing during the period ending 31 August 2023.
CER in this appendix for the year ended 28 February 2022 is calculated using
exchange rates prevailing during the year ending 28 February 2023.
Nomenclature: ROE - rest of Europe; ROW - rest of world; yoy - year-on-year;
CER - constant exchange rate
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