Boohoo posts sharp increase in first half sales and profits

Online fashion retailer Boohoo appeared to successfully navigate the media furore over the allegedly sub-standard working conditions at one of its suppliers, posting sharp increases in sales and profits for the half.

The firm also guided higher for full-year sales growth.

Revenues over the six months ending on 31 August printed at £816.5m, up 45% on the comparable year earlier figure and in-line with the previous quarter's gain.

That drove a 51% jump in profits before tax to £68.1m.

Boohoo's operating cash-flow meanwhile improved from £55.9m one year ago to £147.2m and its net cash flow from £15.5m to £99.5m.

Looking ahead, Boohoo guided towards growth of 28-32% in full-year profits, up from the 25% previously forecast.

Nonetheless, Michael Hewson, chief market analyst at CMC Markets UK, labelled the company's guidance "cautious", pointing out that the new target range for topline growth "was still quite a step down from the increase seen in the first half of this year, even if it is a modest upgrade."

Net cash at period end stood at £344.9m, marking an increase of £137.6m, but again, as Hewson pointed out "some of that was as a result of the recent share placing to fund future acquisitions."

"For the moment the stellar growth continues for Boohoo, as does a share price which has fully recouped the declines of July to stand up 31% in the year to date and ahead by 48% over the last year, as compared to an increase of 9% for the wider FTSE AIM 100 index," said Interactive Investors Head of Markets, Richard Hunter.

"At these levels the company would be eligible for inclusion in the FTSE100 if it so chose, although for the moment Boohoo seems relaxed in being a larger fish in a smaller investment pond.

"Appetite for the stock remains undiminished despite the reputational cloud which had hung over the company and even some concerns around stretched valuations, with the market consensus of the shares as a strong buy likely to hold firm for the time being."