REG - boohoo group plc - Trading Update

BoohooAnnouncement

19/01/2023 07:00

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RNS Number : 1935N  boohoo group plc  19 January 2023

 
 
                19 January 2023

 

 

boohoo group plc - trading statement for the four months to 31 December 2022

("boohoo" or "the Group")

 

                      Four months to 31 December
 £ million            FY23     FY22     Change on FY22                                           CER((1))  Change on FY20
 Group total revenue  637.7    714.5                              -11%                           -13%      +35%
 Revenue by region
   UK                 400.8    451.0    -11%                                                     -11%      +57%
   ROE((2))           73.5     79.9     -8%                                                      -11%      +6%
   USA                128.9    145.8    -12%                                                     -17%      +17%
   ROW((3))           34.5     37.8     -9%                                                      -15%      -9%

 

(1) CER designates Constant Exchange Rate translation of foreign currency
revenue. (2) ROE is rest of Europe. (3) ROW is rest of world.

 

Financial and operational highlights

·    In line with previous guidance, group revenue declined 11%. UK
revenues declined 11% year on year, versus a strong prior year comparative.
International revenues declined 10% year on year, with extended delivery times
compared to pre-pandemic levels continuing to affect the proposition

·    Gross margin for the period of 49.7% is broadly in line with
expectations, and expected to improve year on year in P4 with a reduction in
markdown activity anticipated compared to the same period last year

·    Inventory continues to be tightly controlled, with improving speed
and flexibility within our global supply base and inventory significantly
reduced, down 27% year on year

·   Improvements in cash generation through tighter inventory management,
cost control and an improved working capital cycle

·    Significant liquidity headroom with more than £300 million of gross
cash at the end of December, with net debt expected to be less than 1x
Adjusted EBITDA at the end of the financial year

·   Successful launch of automation in the Group's distribution centre in
Sheffield, with improvements to efficiency ramping up over the coming months
in line with expectations

·   Progress continues to be made with our US distribution centre, driving
a step change in our customer proposition, expected to launch with a phased
approach over 2023 and early 2024

·   Overheads continue to be managed tightly against a challenging economic
backdrop, including a reduction in capacity in the UK distribution network,
with action across the Group focusing on reducing costs.

 

Guidance and outlook

For the year ending 28 February 2023, adjusted EBITDA is expected to be in
line with market expectations. Revenues are expected to decline approximately
12% over the financial year, with an adjusted EBITDA margin of approximately
3.5%.

With recent positive signs in global supply chains, we expect to see some
easing of disruption along with some relief to freight rates. Combined with
the actions being undertaken on costs across the Group, it is expected that
overall cost growth begins to moderate as the year progresses along with an
improved cost inflation outlook exiting the year ahead. The Group's focus
continues to be on optimising its operations and investing selectively in key
strategic projects that best position it to rebound strongly as conditions
normalise.

 

John Lyttle, CEO, commented:

"Performance in the period is in line with expectations and reflects the
normalisation of the channel shift online over the last twelve months, but
demonstrates the significant market share gains the Group has made over the
last three years. Looking ahead, whilst the demand outlook is uncertain due to
macro-economic factors, cost inflation is expected to begin to moderate in the
second half of the year.

We have reduced inventory by 27% year on year and with this focus on careful
inventory management, strong cost control and cash management, we will
continue to drive operational and cost efficiency across the business. The
Group has continued to invest in key strategic priorities that will enable
future growth, and the progress made gives us confidence that as
macro-economic headwinds ease it will be well-positioned to rebound strongly."

 

Notice of full year results

The Group intends to publish its Full Year results for the 12 months ended 28
February 2023 in May 2023.

 

 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
 Clara Melia, Investor Relations                       Tel: +44 (0)20 3289 5520
 Mark Mochalski, Investor Relations                    Tel: +44 (0)20 3239 6289

 Zeus Capital - Nominated adviser and joint broker
 Andrew Jones / James Edis / Dan Bate                  Tel: +44 (0)161 831 1512
 Benjamin Robertson                                    Tel: +44 (0)20 3829 5000

 Jefferies - Joint broker
 Philip Noblet                                         Tel: +44 (0)20 7029 8000
 Ed Matthews                                           Tel: +44 (0)20 7029 8000

 Buchanan - Financial PR adviser                       boohoo@buchanan.uk.com
 Richard Oldworth / Toto Berger / Verity Parker        Tel: +44 (0)20 7466 5000

 

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 2022, the boohoo group had 19 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
"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.

 

 

Appendix - prior period revenues by region

 

Revenue by period for the 10 months to 31 December 2022 (FY23)

 

 £m     4m to 31 December               10m to 31 December
        FY23   FY22   yoy %  yoy % CER  FY23     FY22     yoy %  yoy %

                                                                 CER
 Total  637.7  714.5  -11%   -13%       1,520.1  1,690.4  -10%   -12%

 Revenue by region
  UK    400.8  451.0  -11%   -11%       945.4    1,020.5  -7%    -7%
  ROE   73.5   79.9   -8%    -11%       175.6    184.3    -5%    -7%
  USA   128.9  145.8  -12%   -17%       306.3    396.2    -23%   -27%
  ROW   34.5   37.8   -9%    -15%       92.8     89.4     +4%    -2%

 

 

 £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  486.1  -8%    -10%       436.7  489.8  -11%   -13%   882.4  975.9  -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   +12%   +5%    58.3   51.5   +14%   +8%

 

Revenue by period for the year to 28 February 2022 (FY22)

 

 £m     4m to 31 December               2m to 28 February           12m to 28 February
        FY22   FY21   yoy %  yoy % CER  FY22   FY21   yoy %  yoy %  FY22     FY21     yoy %  yoy %

                                                             CER                             CER
 Total  714.5  660.8  8%     9%         292.5  268.0  9%     10%    1,982.8  1,745.3  14%    15%
 Revenue by region
  UK    451.0  356.7  26%    26%        182.3  158.3  15%    15%    1,202.8  945.1    27%    27%
  ROE   79.9   90.3   -11%   -9%        34.9   30.5   14%    14%    219.2    244.7    -10%   -8%
  USA   145.8  168.2  -13%   -13%       55.4   64.6   -14%   -12%   451.6    435.1    4%     6%
  ROW   37.8   45.6   -17%   -16%       19.8   14.6   36%    36%    109.2    120.4    -10%   -8%

 

 £m     3m to 31 May                    3m to 31 August             6m to 31 August
        FY22   FY21   yoy %  yoy % CER  FY22   FY21   yoy %  yoy %  FY22   FY21   yoy %  yoy %

                                                             CER                         CER
 Total  486.1  367.8  32%    34%        489.8  448.7  9%     10%    975.9  816.5  20%    21%
 Revenue by region
  UK    274.5  183.0  50%    49%        294.9  247.2  19%    19%    569.4  430.2  32%    32%
  ROE   54.4   63.4   -14%   -10%       50.0   60.3   -17%   -14%   104.4  123.7  -16%   -12%
  USA   131.9  92.0   43%    48%        118.6  110.2  8%     10%    250.5  202.2  24%    28%
  ROW   25.2   29.4   -15%   -11%       26.3   31.0   -15%   -13%   51.5   60.4   -15%   -12%

 

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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