Boohoo interim revenue beats expectations

In the six months to the end of August, pre-tax profit jumped 83% to £45.2m on revenue of £564.9m, up 43% on the same period a year ago and ahead of analysts’ expectations of around £548m.

Adjusted earnings before interest, tax, depreciation and amortisation rose 53% to £60.7m.

Revenue in the UK grew 35%, while international revenue - which now makes up 44% of group revenue versus 41% a year earlier - rose 55%.

Revenue at Boohoo increased 34% during the half to £281m, while revenue at PrettyLittleThing was up 41% at £237.6m and NastyGal saw a 148% surge to £43.9m.

Boohoo said net cash rose to £207.4m from £155.6m.

Chief executive officer John Lyttle said: "It has been a fantastic first half of the year for the group. We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded £1 billion in the last 12 months.

"We have delivered strong growth and operating leverage in our more established brands and will continue to invest in both our more established and newly-acquired brands. We enter the second half of the year well-placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well-invested infrastructure, will deliver further market share gains."

At 0905 BST, the shares were down 2% at 260.60p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "A trading update earlier in the month means we already knew these results were going to be impressive - but what stands out is the breadth of that success. All three of Boohoo’s major brands are seeing sales soar, important because we’ve always had a worry that Nasty Gal would could end up cannibalising PrettyLittleThing or vice versa. The group’s social media led marketing is chiming with younger consumers around the world too, with international sales racking up even faster than in the UK.

"This top line growth is translating into profit in the pocket. Margins are up as increased sales are put through the same fixed cost base, and with the current round of major capital projects complete, cash conversion has improved. That’s left the group with a growing cash pile, which should allow Boohoo to invest behind the launch of recently acquired premium clothing lines Karen Millen and Coast.

"These more mature brands are a bit of departure for the group - which has been squarely aimed at teenagers. It’s a potentially lucrative market if the group can crack it, but only time will tell if influencer-led marketing will resonate with a consumer base which is perhaps more familiar with Buffy than Cardi B."

Shore Capital analysts Greg Lawless and Clive Black said Boohoo has real momentum and continues to win market share globally.

"The recent acquisitions in Karen Millen and Coast broadens the product range into older demographics group and increases the potential addressable market that the group can serve.

"Boohoo is our top pick amongst the clothing retailers and we highlight the international prospects of the business (now 44% of group revenues), growth across all brands, strength of the balance sheet and the opportunity to scale the recent acquisitions through the group’s multi-brand platform. We reiterate our ‘buy’ rating suggesting upside towards our fair value of 300p."