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RNS
boohoo group plc   -  BOO   

Final Results

Released 07:00 24-Apr-2019

RNS Number : 8649W
boohoo group plc
24 April 2019
 

For Immediate Release                                                                                24 April 2019

 

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 - final results for the year ended 28 February 2019

                                                                                                                                       

Strong growth and solid profitability

 

2019

2018

Change

 

£ million

£ million

 

Revenue

856.9

579.8

+48%

Gross profit

469.0

306.4

+53%

Gross margin

54.7%

52.8%

+190bps

Adjusted EBITDA(1)

84.5

56.9

+49%

% of revenue

9.9%

9.8%

+10bps

Adjusted EBIT(2)

75.1

50.4

+49%

% of revenue

8.8%

8.7%

+10bps

Adjusted profit before tax(3)

76.3

51.0

+49%

Profit before tax

59.9

43.3

+38%

Adjusted diluted earnings per share(4)

4.15p

3.23p

+29%

Diluted earnings per share

3.22p

2.71p

+19%

Net cash(5) at year end

190.7

133.0

+£57.7 million

 

 

Financial Highlights

Group

·     Revenue £856.9 million, up 48% (47% CER(6))

·     Strong revenue growth across all geographies with UK up 37% and international up 64%

·     Gross margin increased to 54.7% (2018: 52.8%)

·     Adjusted EBITDA £84.5 million, 9.9% of revenue (2018: £56.9 million, 9.8%)

·     Adjusted profit before tax £76.3 million (2018: £51.0 million)

·     Strong balance sheet with net cash of £190.7 million (2018: £133.0 million), with robust operating cash flow of £111.9 million (2018: £76.2 million)

boohoo

·     Revenue £434.6 million up 16% (15% CER)

·     Gross margin 52.9%, up 170bps

PrettyLittleThing

·     Revenue £374.4 million up 107% (107% CER)

·     Gross margin 56.6% up 140bps

Nasty Gal

·     Revenue £47.9 million up 96% (100% CER)

·     Gross margin 56.7% down 290bps

 

Operational Highlights

Group

·     Burnley distribution centre extension build and fit-out completed, with automation live in April 2019

·     PrettyLittleThing's distribution centre successfully relocated to a larger facility in Sheffield

boohoo

·     7.0 million active customers(7), up 9% on prior year

·     Strong international growth, now 44% of total revenue

·     Significant investments in customer service improving the customer proposition

PrettyLittleThing

·     5.0 million active customers, up 70% on prior year

·     Customer proposition resonating with consumers, driving growth and increasing market share

·     High profile celebrity associations driving traffic and international expansion, exceptionally well in the US

Nasty Gal

·     0.9 million active customers, up 122% on prior year

·     Extensive product range now comprises over 8,000 lines

·     Strong growth in US home market and international appeal and revenue growing rapidly

 

 

Outlook and guidance

Trading in the first few weeks of the financial year has been encouraging. Group revenue growth for the financial year is expected to be 25% to 30% with an adjusted EBITDA margin of around 10% and capital expenditure in the region of £50 to £60 million. This guidance includes the adoption of IFRS 16, which is expected to increase EBITDA by £4 to £5 million and be broadly neutral at a Profit Before Tax level.

Looking beyond the current year, we will continue to make investments across the group as part of our vision to lead the global fashion e-commerce market. Whilst this will require continued investments in people and infrastructure, we believe that the benefits of our multi-brand platform will continue to generate economies of scale, allowing us to target sales growth of 25% per annum, with an adjusted EBITDA margin of around 10% over the medium term.

 

John Lyttle, CEO, commented:

"I am very excited to have joined the boohoo Group at this key stage of its growth, with the group's disruptive and proven business model having delivered yet another excellent set of financial and operational results. In my short time within the business, I am delighted to have been able to meet a number of hugely talented people and have already been able to see many parts of the business. This has confirmed my belief and optimism that the group's investments into its brands and infrastructure have allowed it to develop a scalable multi-brand platform that is well-positioned to disrupt, gain market share and capitalise on what is a truly global opportunity."

 

Investor and analyst meeting

 

A meeting for analysts will be held today at the office of Buchanan, 107 Cheapside, London, EC2V 6DN commencing 9.30am (UK time).

 

A live audio webcast will be available at 9.30am via the following link:

http://webcasting.buchanan.uk.com/broadcast/5c6bc25be6e1d92d38f4ed2d

 

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

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, boohoo is an inclusive and innovative brand targeting young, value-orientated customers. For 13 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, and now has over seven million active customers.

 

In early 2017 the group extended its customer offering through the acquisitions of the vibrant fashion brand PrettyLittleThing, and free-thinking brand Nasty Gal and in March 2019 acquired the Miss Pap brand. 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 has 13 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

"Another outstanding year from all our brands across all regions."

Overview

 

2019

2018

Change

 

£000

£000

 

Revenue

856,920

579,800

+48%

Gross profit

468,994

306,355

+53%

Gross margin

54.7%

52.8%

+190bps

EBITDA

72,601

53,663

+35%

% of revenue

8.5%

9.3%

-80bps

Profit before tax

59,856

43,313

+38%

Diluted earnings per share

3.22p

2.71p

+19%

Net cash(1) at year end

190,726

133,047

+£57.7m

Underlying:

 

 

 

   Adjusted EBITDA(2)

84,546

56,932

+49%

   % of revenue

9.9%

9.8%

+10bps

   Adjusted EBIT(3)

75,074

50,403

+49%

   % of revenue

8.8%

8.7%

+10bps

   Adjusted profit before tax(4)

76,250

51,031

+49%

   Adjusted diluted earnings per share(5)

4.15p

3.23p

+29%

 

 

(1) Net cash is cash less borrowings.

(2) Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, share-based payment charges and exceptional items.

(3) 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.

(4) Adjusted profit before tax is calculated as profit before tax, excluding share-based payment charges and amortisation of acquired intangible assets and exceptional items.

(5) Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired intangibles, share-based payment charges and exceptional items.

 

Group revenue for the year increased by 48% (47% CER) to £856.9 million (2018: £579.8 million). Revenue growth across all territories and brands was strong.

Adjusted EBITDA was £84.5 million (2018: £56.9 million), an increase of 49%, with improved gross margin across the group leading to an adjusted EBITDA margin of 9.9% (2018: 9.8%). Adjusted profit before tax was £76.3 million (2018: £51.0 million), an increase of 49%. Profit before tax was £59.9 million (2018: £43.3 million), an increase of 38%. Adjusted diluted earnings per share was 4.15p, up 29% on the prior year. Diluted earnings per share rose to 3.22p, an increase of 19% (2018: 2.71p).

The group has performed exceptionally well during the year. Revenues have increased across all our brands in all regions. Our focus on key international markets has been highly successful, producing growth of 64% and increasing international revenues to 43% of total revenue. PrettyLittleThing continues to perform exceptionally well, with a growth rate of 107%. Market share is increasing, driven by the customer proposition of great fashion at unbeatable prices, supported by an engaging social media presence and successful celebrity endorsements. Gross margins have improved as a result of stronger sell through, tighter control on stock cover and refinement of the customer proposition. Substantial investments have been completed to secure warehouse capacity for growth and improve the future efficiency of the Burnley warehouse with automation.

Cash flow generation was strong, with free cash flow up 118% to £65.1 million. Capital expenditure was £46.9 million as we invest in our infrastructure ahead of our growth curve. Our net cash balance at the period end increased to £190.7 million (2018: £133.0 million).

Distribution centres                                                                      

During the year, the Burnley distribution centre extension build and fit-out was completed. Automation went live in April 2019, which will greatly improve picking efficiency and reduce costs in the financial year 2020 and beyond. We opened new welfare facilities to all Burnley employees and provided a bus service to the distribution centre from nearby towns. PrettyLittleThing's ("PLT") distribution centre relocation to Sheffield was completed successfully during July and August, with a low level of disruption to operations. Costs associated with this relocation are considered exceptional and amounted to £6.7 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. We continue to invest in our infrastructure, with our operations at Burnley and Sheffield representing significant stepping stones as we build towards creating a distribution network capable of generating £3 billion of net sales globally.

 

boohoo (including boohooMAN)

Performance

Revenue for the year increased to £434.6 million, up 16% on the previous year, with growth in all our key focus markets.

International growth continues to be strong and we are continuing to gain market share in the UK. Gross margin increased by 170bps to 52.9%, driven by improved stock control and refinement of the customer proposition.

Product

Our comprehensive size range offerings, the breadth of the product range and continuous fresh introductions have continued to drive growth. Hundreds of new styles are added daily and the very latest fashions appear within days or weeks of trends being spotted by our fashion experts and offered to our customers at affordable prices. boohooMAN has performed strongly with an extensive product range and increasing customer reach.

Marketing

Marketing activity 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 marketing activities continued using a successful formula of a mix of media, including social media influencers, reality TV ambassadors, bloggers, TV, outdoor, email, student events and digital acquisition channels. Our social media presence continues to grow and we now have 5.9 million followers on Instagram, 2.9 million Facebook fans and 0.5 million followers on Twitter.

Customer interaction

Active customer numbers over the last 12 months increased by 9% to 7.0 million. Conversion rate to sale decreased from 4.3% to 3.9% of sessions, when measured on website statistics alone.  Order frequency increased 0.3%, with customers placing an order with us, on average, 2.14 times in 12 months, whilst the number of items per basket decreased 1% to 3.04.

Refinements to the customer proposition included free returns, next day delivery, shortened delivery times and more overseas collection points. The cut-off time for next day delivery in the UK is 11pm and SMS messaging for delivery status has been introduced. We are trialling artificial intelligence in customer contact response. We have 17 country-specific websites and have plans to introduce more foreign language websites optimised for local criteria, in line with our aim to attain best-in-class customer service.

Technology

The principal technology projects completed 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.

The website and app are subject to continuous improvement in content, functionality, personalisation and ease of use. During the year we added visual search to the website, which enables customers to search for similar items either from a photograph they have uploaded or from an image on the website. Our app has been downloaded by nearly two million customers, generating a considerable growth in the number of visits.

 

PrettyLittleThing

Performance

PrettyLittleThing ("PLT") has had an enormously successful year, with revenues increasing by 107% to £374.4 million. All territories delivered strong growth and significant increases in market share and it is clear that there is both the demand and potential for this to continue. The relocation of the distribution centre to Sheffield in the summer was executed extremely well, with a low level of disruption to the business during the move. Exceptional costs associated with the move amounted to £6.7 million. Gross margin has increased 140bps to 56.6%, with stronger sell-through and refinements to the customer proposition.

Product

Renowned for having the latest and most relevant celebrity looks, PLT offers over 20,500 styles at affordable prices to its customers. PLT's "shape" ranges, which include Petite, Tall, Shape and Plus, have proved very popular in the year and have driven growth. Highly successful celebrity collaborations in the year included those with Model Hailey Baldwin, UK Radio presenter Maya Jama, American Hip-Hop stylist Karl Kani and US model Ashley Graham. The Karl Kani collaboration launched in January 2019 included PLT's first ever unisex product range.

Marketing

The PLT brand is promoted through a global multi-channel marketing approach which seeks to engage with customers across the world. Celebrity collaborations are supported by an influencer network which seeks to leverage the power of social media to engage with our customers, giving us a combined reach of over 350 million impressions globally. The PLT 'Royalty' programme, which has shown significant growth in the year, gives customers in the UK and Ireland free unlimited next day delivery and seeks to generate increased customer loyalty to the PLT brand. Brand awareness is also supported by more traditional marketing approaches such as PLT's sponsorship of the E! entertainment channel in the UK, Ireland, France and Australia, which directly appeals to PLT's target market, as well as out-of-home advertising including the now iconic fleet of PLT taxis operating in major cities throughout the UK.

Customer interaction

We support eight country-specific websites and have plans for further foreign language sites next year, 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. Customers have the option of using a virtual customer service assistant for frequently asked questions, which greatly reduces response wait time as well as cutting costs.

Active customer numbers over the last 12 months increased by 70% to 5.0 million. Conversion rate to sale decreased from 3.7% to 3.3% of sessions, when measured on website statistics alone.  Order frequency increased 12%, with customers placing an order with us, on average, 2.84 times in 12 months, whilst the number of items per basket increased 12% to 2.72. We have 1.9 million followers on Facebook, 0.3 million followers on Twitter, 10.5 million Instagram followers, as well as a presence on several other social media channels.

Technology

Investment in technology is paramount to PLT's success and we have a programme of work across our services and customer-facing applications.  The separation of systems with our micro-service architecture has allowed our platform to be more adaptable to cope with the business's pace of change and the continuing growth of our customers' order volumes and website traffic.  Through the global reach of the Cloud, we can roll out new services worldwide so they are hosted as close as possible to our customers and built in a way we can ensure high performance.  This agility will allow us to continue to invest at pace, delivering new experiences and innovation to our customers.

 

Key highlights for this year have been the introduction of a new automated chatbot which provides customers with instant assistance on a number of contact categories. New payment methods have been launched, with further payment options planned for the coming financial year. Our iOS and android apps have been developed throughout the year to improve the customer experience and conversion rates.

 

Nasty Gal

Performance

Revenue growth has been strong across all territories with a growth rate of 96%, increasing revenue to £47.9 million. In the brand's principal market, the USA where the brand originated, growth has been very strong. The next largest market is the UK, where brand awareness has increased substantially and growth has been exceptionally high. Gross margin was 56.7%, a reduction on the previous year but in line with our proposition strategy.

Product

The product range has increased substantially to over 8,000 styles 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 likes to express her personality through the clothes she wears. The appeal of the brand extends outside of the USA, as rapidly increasing sales in the UK have proven.

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. Key influencers engaged during the year included Taylor le Shae and Emma Louise Connelly.

Customer interaction

Nasty Gal operates through six country and regional websites and Android and iOS apps in the UK, US and the Australian markets.

On social media we have 3.6 million followers on Instagram, 1.3 million Facebook likes and 0.2 million followers on Twitter.

 

 

 

From strength to strength

Financial review

"The group has achieved a strong performance with revenues and profits increasing in all territories."

 

Group revenue by brand

 

2019

2018

Change

Change

 

£000

£000

 

CER

boohoo

434,565

374,115

+16%

+15%

PrettyLittleThing

374,445

181,269

+107%

+107%

Nasty Gal

47,910

24,416

+96%

+100%

 

856,920

579,800

+48%

+47%

 

Group revenue by geographical market

 

 

2019

2018

Change

Change

 

£000

£000

 

CER

UK

488,199

355,614

+37%

+37%

Rest of Europe

115,124

66,281

+74%

+67%

USA

166,262

92,690

+79%

+81%

Rest of world

87,335

65,215

+34%

+30%

 

856,920

579,800

+48%

+47%

 

KPIs

boohoo

 

 

2019

2018

Change

 

Active customers(1)

7.0 million

6.4 million

+9%

Number of orders

 14.9 million

13.6 million

+10%

Order frequency(2)

2.14

2.13

+0.3%

Conversion rate to sale (3)

3.9%

4.3%

-36bps

Average order value(4)

£41.38

£39.25

+5%

Number of items per basket

3.04

3.06

-1%

 

 

 

 

 

PrettyLittleThing

 

 

2019

2018

Change

 

Active customers(1)

5.0 million

3.0 million

+70%

Number of orders

14.3 million

 7.5 million

+89%

Order frequency(2)

2.84

2.55

+11.7%

Conversion rate to sale (3)

3.3%

3.7%

-47bps

Average order value(4)

£40.41

£36.05

+12%

Number of items per basket

2.72

2.43

+12%

 

 

Nasty Gal

 

 

2019

2018

Change

 

Active customers(1)

0.9 million

0.4 million

+122%

Number of orders

1.3 million

0.6 million

+128%

Order frequency(2)

1.41

1.37

+2.9%

Conversion rate to sale (3)

2.5%

1.7%

+71bps

Average order value(4)

£49.83

£52.82

-6%

Number of items per basket

3.15

2.89

+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

 

 

Consolidated income statement

 

 

2019

2018

Change

 

£000

£000

 

Revenue

856,920

579,800

+48%

Cost of sales

(387,926)

(273,445)

+42%

Gross profit

468,994

306,355

+53%

Gross margin

54.7%

52.8%

+190bps

 

 

 

 

Operating costs

(384,687)

(249,582)

 

Other income

239

159

 

Adjusted EBITDA

84,546

56,932

+49%

Adjusted EBITDA margin %

9.9%

9.8%

+10bps

 

 

 

 

Depreciation

(6,972)

(3,997)

 

Amortisation of other intangible assets

(2,500)

(2,532)

 

Adjusted EBIT

75,074

50,403

+49%

Adjusted EBIT margin %

8.8%

8.7%

+10bps

 

 

 

 

Adjusting items:

 

 

 

Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets

(4,449)

(4,449)

 

Equity-settled share-based payment charges

(5,278)

(3,269)

 

Exceptional items - warehouse relocation

(6,667)

-

 

Operating profit

58,680

42,685

+37%

 

 

 

 

Finance income

1,320

774

 

Finance expense

(144)

(146)

 

Profit before tax

59,856

43,313

+38%

Tax

(12,397)

(7,313)

 

Profit after tax for the year

47,459

36,000

+32%

 

 

 

 

Diluted earnings per share

3.22p

2.71p

+19%

 

 

 

 

Adjusted profit after tax for the year

60,803

42,310

+44%

Amortisation of acquired PrettyLittleThing and Nasty Gal intangible assets

(4,449)

(4,449)

 

Share-based payment charges

(5,278)

(3,269)

 

Exceptional items - warehouse relocation

(6,667)

-

 

Adjustment for tax

3,050

1,408

 

Profit after tax for the year

47,459

36,000

 

 

 

 

 

Adjusted profit for the period attributable to shareholders of the company

48,781

37,610

+30%

Adjusted diluted earnings per share

4.15p

3.23p

+29%

Gross margin increased from 52.8% to 54.7%, due to improvements in the customer proposition, tighter stock control and reduced clearance.

Operating costs comprise distribution costs and administrative expenses excluding depreciation and amortisation and have increased by 180bps on revenue. The distribution cost element excluding depreciation and exceptional item has increased with revenue growth and increased on the prior year as a percentage of revenue by 146bps due to the higher proportion of international shipments. The administrative expense element, which includes marketing expenses, but excluding the exceptional item, share-based payment charges, depreciation, amortisation and amortisation of acquired intangibles, has risen due to the combination of revenue growth and the building of our infrastructure to support the future business expansion and increased by a small margin of 37bps on the prior year percentage of revenue.

Adjusted EBITDA, which is not a statutory measure, represents earnings before interest, tax, depreciation, amortisation, non-cash share-based payments charges and exceptional items. It provides a useful measure of the underlying profitability of the business. Adjusted EBITDA increased by 49% from £56.9 million to £84.5 million and, as a percentage of revenue, increased from 9.8% to 9.9%.

Adjusted profit after tax, as with Adjusted EBITDA, provides another more consistent measure of the underlying profitability of the business by removing non-cash amortisation of intangible assets relating to the acquisition of PrettyLittleThing and Nasty Gal (being their trademarks and customer lists), share-based payment charges and exceptional items.

 

Taxation

 

The effective rate of tax for the year was 20.7% (2018: 16.9%), which is higher (2018: lower) than the blended UK statutory rate of tax for the year of 19.0% (2018: 19.1%), due to expenditure not deductible for tax purposes, the increase this year being principally depreciation on buildings and fit-out.

 

Consolidated statement of financial position

 

 

2019

2018

 

 

£000

£000

Intangible assets

 

27,165

30,877

Property, plant and equipment

 

108,498

71,994

Financial assets

 

3,756

2,445

Deferred tax asset

 

4,034

6,479

Non-current assets

 

143,453

111,795

 

 

 

 

Working capital

 

(64,969)

(30,923)

Net financial assets

 

4,047

5,466

Cash and cash equivalents

 

197,872

142,575

Interest-bearing loans and borrowings

 

(7,146)

(9,528)

Deferred tax liability

 

(2,102)

(2,101)

Net current tax liability

 

(753)

(4,505)

Net assets

 

270,402

212,779

 

Working capital has reduced primarily due to an increase in payables and accruals relating to our increased trading activity.

 

 

Intangible and fixed asset additions

 

 

 

2019

2018

 

 

£000

£000

Purchased intangible and fixed assets

 

 

 

Intangible assets

 

 

 

 Patents and licences

 

307

9

 Software

 

2,930

2,403

 

 

3,237

2,412

Tangible fixed assets

 

 

 

 Distribution centres

 

36,678

33,753

 Offices, office equipment, fixtures and fit-outs

 

6,837

9,991

 Motor vehicles

 

115

228

 

 

43,630

43,972

 

 

 

 

Total intangible and fixed asset additions

 

46,867

46,384

 

 

 

Liquidity and financial resources

Operating cash flow was £111.9 million compared to £76.2 million in the previous year and free cash flow was £65.1 million compared to £29.9 million in the previous financial year. Capital expenditure was £46.9 million, which includes a £36.7 million investment in our distribution centres to support projected growth in trade. The closing cash balance for the group was £197.9 million and the net cash balance £190.7 million.

 

Consolidated cash flow statement

 

 

2019

2018

 

£000

£000

 

 

 

Profit for the year

47,459

36,000

 

 

 

Depreciation charges and amortisation

13,921

10,978

Share-based payments charge

5,278

3,269

Loss on sale of fixed assets

24

-

Tax expense

12,397

7,313

Finance income

(1,320)

(774)

Finance expense

144

146

Increase in inventories

(18,558)

(14,078)

Increase in trade and other receivables

(4,935)

(5,393)

Increase in trade and other payables

57,513

38,780

Operating cash flow

111,923

76,241

Capital expenditure and intangible asset purchases

(46,867)

(46,384)

Free cash flow

65,056

29,857

 

 

 

Net proceeds from the issue of ordinary shares

3,653

51,531

Purchase of own shares by EBT

(1,833)

-

Proceeds from the sale of fixed assets

59

-

Finance income received

1,249

612

Finance expense paid

(144)

(146)

Tax paid

(10,361)

(7,227)

Repayment of borrowings

(2,382)

(2,382)

Net cash flow

55,297

72,245

 

 

 

Cash and cash equivalents at beginning of year

142,575

70,330

Cash and cash equivalents at end of year

197,872

142,575

 

 

 

       
 

 

Trends and factors likely to affect future performance

The market for online fashion is forecast to continue to grow and, along with the increasing use of the internet globally, provides a favourable backdrop for the group with much opportunity for further growth. Customers throughout the world are seeking a wide choice of quality products at value prices lower than those available on the high street with the convenience of home delivery. The group's target market has a high propensity to spend on fashion and the market is resilient to external macroeconomic factors.

 

Outlook

The continued strong growth of our brands across all geographic regions is highly encouraging. Our proven strategy offering the latest fashion at unbeatable prices, supported by excellent customer service continues to resonate with consumers globally. Investments in our proposition and technology ensure we remain innovative and live up to our customers' expectations.

Our extended Burnley distribution centre now has a significant element of automation, which will enhance productivity and improve efficiency. Following the addition of the Sheffield facility for PrettyLittleThing, our distribution centres in Burnley and Sheffield represent significant stepping stones as we build towards creating a distribution network capable of generating £3 billion of net sales globally.

Trading in the first few weeks of the financial year has been encouraging. Group revenue growth for the financial year is expected to be 25% to 30% with an adjusted EBITDA margin of around 10% and capital expenditure in the region of £50 to £60 million. This guidance includes the adoption of IFRS 16, which is expected to increase EBITDA by £4 to £5 million and be broadly neutral at a Profit Before Tax level.

Looking beyond the current year, we will continue to make investments across the group as part of our vision to lead the global fashion e-commerce market. Whilst this will require continued investments in people and infrastructure, we believe that the benefits of our multi-brand platform will continue to generate economies of scale, allowing us to target sales growth of 25% per annum, with an adjusted EBITDA margin of around 10% over the medium term.

 

 

Consolidated statement of comprehensive income

for the year ended 28 February 2019

 

Note

 

2019

2018

 

 

 

£000

£000

Revenue

2

 

856,920

579,800

Cost of sales

 

 

(387,926)

(273,445)

Gross profit

 

 

468,994

306,355

 

 

 

 

 

Distribution costs

 

 

(207,083)

(126,757)

Exceptional distribution costs

 

 

(6,162)

-

Other distribution costs

 

 

(200,921)

(126,757)

 

 

 

 

 

Administrative expenses

 

 

(203,470)

(137,072)

Exceptional administrative expenses

 

 

(505)

-

Amortisation of acquired intangibles

 

 

(4,449)

(4,449)

Other administrative expenses

 

 

(198,516)

(132,623)

 

 

 

 

 

Other income

3

 

239

159

Operating profit

 

 

58,680

42,685

 

 

 

 

 

Finance income

4

 

1,320

774

Finance expense

 

 

(144)

(146)

Profit before tax

6

 

59,856

43,313

 

 

 

 

 

Taxation

10

 

(12,397)

(7,313)

 

 

 

 

 

Profit for the year

 

 

47,459

36,000

 

 

 

 

 

Profit for the year attributable to:

 

 

 

 

Owners of the parent company

 

 

37,772

31,652

Non-controlling interests

 

 

9,687

4,348

 

 

 

47,459

36,000

 

 

 

 

 

Total other comprehensive income for the year

(Gain)/loss reclassified to profit and loss during the year

 

(2,337)

6,516

Fair value gain on cash flow hedges during the year

 

2,229

12,981

Total comprehensive income for the year

 

 

47,351

55,497

 

 

 

 

 

Total comprehensive income attributable to:

 

 

 

 

Equity attributable to owners of the parent company

 

 

37,664

51,149

Non-controlling interests

 

 

9,687

4,348

 

 

 

47,351

55,497

 

 

 

 

 

Earnings per share

7

 

 

 

Basic

 

 

3.27p

2.78p

Diluted

 

 

3.22p

2.71p

 

 

Consolidated statement of financial position

at 28 February 2019

 

Note

 

2019

2018

                                                                     

 

 

£000

£000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

11

 

27,165

30,877

Property, plant and equipment

12

 

108,498

71,994

Financial assets

 

 

3,756

2,445

Deferred tax

14

 

4,034

6,479

 

 

 

143,453

111,795

Current assets

 

 

 

 

Inventories

15

 

66,806

48,248

Trade and other receivables

16

 

22,576

17,499

Financial assets

 

 

5,883

6,770

Current tax receivable

 

 

3,186

-

Cash and cash equivalents

17

 

197,872

142,575

Total current assets

 

 

296,323

215,092

 

 

 

 

 

Total assets

 

 

439,776

326,887

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

18

 

(154,351)

(96,670)

Interest-bearing loans and borrowings

19

 

(2,382)

(2,382)

Financial liabilities

 

 

(1,421)

(837)

Current tax liability

 

 

(3,939)

(4,505)

Total current liabilities

 

 

(162,093)

(104,394)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Interest-bearing loans and borrowings

19

 

(4,764)

(7,146)

Financial liabilities

 

 

(415)

(467)

Deferred tax

14

 

(2,102)

(2,101)

 

 

 

 

 

Total liabilities

 

 

(166,501)

(114,108)

 

 

 

 

 

Net assets

 

 

270,402

212,779

 

 

 

 

 

Equity

 

 

 

 

Share capital

20

 

11,631

11,496

Share premium

 

 

606,086

602,578

Capital redemption reserve

 

 

100

100

Hedging reserve

 

 

7,803

7,911

EBT reserve

 

 

(2,174)

(351)

Translation reserve

 

 

-

168

Reconstruction reserve

 

 

(515,282)

(515,282)

Non-controlling interest

 

 

19,064

8,761

Retained earnings

 

 

143,174

97,398

Total equity      

 

 

270,402

212,779

           

 

 

Consolidated statement of changes in equity

 

Share capital

Share premium

Capital redemption reserve

Hedging reserve

EBT reserve

Translation reserve

Reconstruction reserve

Non-controlling interest

Retained earnings

Total equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

Balance at 28 February 2017

11,233

551,720

100

(11,586)

(761)

5

(515,282)

3,978

61,089

100,496

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

-

4,348

31,652

36,000

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Loss reclassified to profit and loss in revenue

-

-

-

6,516

-

-

-

-

-

6,516

Fair value gain on cash flow hedges during the year

-

-

-

12,981

-

-

-

-

-

12,981

Total comprehensive income for the year

-

-

-

19,497

-

-

-

4,348

31,652

55,497

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

Translation of foreign operations

-

-

-

-

-

163

-

-

-

163

Balance at 28 February 2018

11,496

602,578

100

7,911

(351)

168

(515,282)

8,761

97,398

212,779

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

-

9,687

37,772

47,459

Other comprehensive income/(expense):

 

 

 

 

 

 

 

 

 

 

Gain reclassified to profit and loss in revenue

-

-

-

(2,337)

-

-

-

-

-

(2,337)

Fair value gain on cash flow hedges during the year

-

-

-

2,229

-

-

-

-

-

2,229

Total comprehensive income for the year

-

-

-

(108)

-

-

-

9,687

37,772

47,351

Issue of shares

135

3,508

-

-

(1,823)

-

-

-

-

1,820

Share-based payments credit

-

-

-

-

-

-

-

616

4,662

5,278

Excess deferred tax on share-based payments

-

-

-

-

-

-

-

-

3,342

3,342

Translation of foreign operations

-

-

-

-

-

(168)

-

-

-

(168)

Balance at 28 February 2019

11,631

606,086

100

7,803

(2,174)

-

(515,282)

19,064

143,174

270,402

 

Consolidated cash flow statement

for the year ended 28 February 2019

 

 

Note

 

2019

2018

 

 

 

£000

£000

Cash flows from operating activities

 

 

 

 

Profit for the year

 

 

47,459

36,000

Adjustments for:

 

 

 

 

Share-based payments charge

 

 

5,278

3,269

Depreciation charges and amortisation

 

 

13,921

10,978

Loss on sale of fixed assets

 

 

24

-

Finance income

 

 

(1,320)

(774)

Finance expense

 

 

144

146

Tax expense

 

 

12,397

7,313

 

 

77,903

56,932

 

 

 

 

 

Increase in inventories

15

 

(18,558)

(14,078)

Increase in trade and other receivables

16

 

(4,935)

(5,393)

Increase in trade and other payables

18

 

57,513

38,780

Cash generated from operations

 

 

111,923

76,241

 

 

 

 

 

Tax paid

 

 

(10,361)

(7,227)

Net cash generated from operating activities

 

 

101,562

69,014

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Acquisition of intangible assets

11

 

(3,237)

(2,412)

Acquisition of property, plant and equipment

12

 

(43,630)

(43,972)

Proceeds from the sale of fixed assets

 

 

59

-

Finance income received

 

 

1,249

612

Net cash used in investing activities

 

 

(45,559)

(45,772)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from the issue of ordinary shares

 

 

3,653

52,281

Share issue costs written off to share premium

 

 

-

(750)

Purchase of own shares by EBT

 

 

(1,833)

-

Finance expense paid

 

 

(144)

(146)

Repayment of borrowings

 

 

(2,382)

(2,382)

Net cash (used in)/generated from financing activities

 

 

(706)

49,003

 

 

 

 

 

Increase in cash and cash equivalents

 

 

55,297

72,245

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

 

142,575

70,330

Cash and cash equivalents at end of year

 

 

197,872

142,575

 

 

Notes to the financial statements

(forming part of the financial statements)

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 and changed its name from boohoo.com plc to boohoo group plc on 10 July 2018.

Basis of preparation

This condensed consolidated financial information for the year ended 28 February 2019 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the European Union ("Adopted IFRSs"), IFRS IC Interpretations and the Companies (Jersey) Law 1991.

 

The financial information contained in this preliminary announcement for the years ended 28 February 2019 and 28 February 2018 does not comprise the group's statutory financial statements within the meaning of Companies (Jersey) Law 1991. Statutory accounts for the year ended 28 February 2019 will be filed with the Jersey Companies Registry in due course. The auditors' report on the statutory accounts for each of the years ended 28 February 2019 and 28 February 2018 is unqualified, does not draw attention to any matters by way of emphasis and does not contain any statement under any matters that are required to be reported by exception under Companies (Jersey) Law 1991.

 

Standards, amendments and interpretations to standards that are effective and have been adopted by the group and/or company.

IFRS 9, "Financial instruments" (effective 1 January 2018). It has been determined that all existing effective hedging instruments continued to qualify for hedge accounting under IFRS 9. The adoption of the standard has therefore had no effect on the financial statements. Changes to the classification, impairment and measurement of financial assets and liabilities have been considered and it has been concluded these changes do not impact the group.    

IFRS 15, "Revenue from contracts with customers" (effective 1 January 2018). Revenue is recognised in the financial statements when the customer receives the goods ordered. Revenue from the purchase of annual delivery services is spread over the period of the service. The adoption of the standard has therefore had no impact on existing revenue recognition policies.

 

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 preliminary announcement, the directors have also made reasonable and prudent judgements and estimates and prepared the preliminary announcement on the going concern basis. The preliminary 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.

 

 

 

2              Segmental analysis

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 2019 is by business unit. This is based on the group's management and internal reporting structure, i.e. boohoo including boohooMAN, PrettyLittleThing ("PLT") and Nasty Gal.

The executive board assesses the performance of each segment based on revenue and gross profit after distribution expenses and before administrative expenses.

 

 

 

Year ended 28 February 2019

 

 

boohoo

PLT

Nasty Gal

Total

 

 

£000

£000

£000

£000

Revenue

 

434,565

374,445

47,910

856,920

 

 

 

 

 

 

Cost of sales

 

(204,474)

(162,687)

(20,765)

(387,926)

Gross profit

 

230,091

211,758

27,145

468,994

 

 

 

 

 

 

Distribution costs

 

(98,901)

(90,000)

(12,020)

(200,921)

Exceptional distribution costs

 

-

(6,162)

-

(6,162)

Segment result

 

131,190

115,596

15,125

261,911

 

 

 

 

 

 

Administrative expenses - other

 

-

-

-

(198,516)

Exceptional administrative expenses

 

-

-

-

(505)

Amortisation of acquired intangibles

 

-

-

-

(4,449)

Other income

 

-

-

-

239

Operating profit

 

-

-

-

58,680

 

 

 

 

 

 

Finance income

 

-

-

-

1,320

Finance expense

 

-

-

-

(144)

Profit before tax

 

-

-

-

59,856

 

 

 

Year ended 28 February 2018

 

 

 

boohoo

PLT

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 - other

 

-

-

-

(132,623)

 

Amortisation of acquired intangibles

 

-

-

-

(4,449)

 

Other income

 

-

-

-

159

 

Operating profit

 

-

-

-

42,685

 

 

 

 

 

 

 

 

Finance income

 

-

-

-

774

 

Finance expense

 

-

-

-

(146)

 

Profit before tax

 

-

-

-

43,313

 

 

 

Revenue by geographic region

 

 

2019

2018

 

 

£000

£000

UK

 

488,199

355,614

Rest of Europe

 

115,124

66,281

USA

 

166,262

92,690

Rest of world

 

87,335

65,215

 

 

856,920

579,800

 

3             Other income

 

 

2019

2018

 

 

£000

£000

Property rental income

 

239

159

 

 

4             Finance income and expense

 

 

2019

2018

 

 

£000

£000

Finance income: Bank interest received

 

1,320

774

Finance expense: Loan interest paid

 

(144)

(146)

 

 

 

5             Auditors' remuneration

 

2019

2018

 

£000

£000

Audit of these financial statements

10

10

Disclosure below based on amounts receivable in respect of services to the group

Amounts receivable by auditors and their associates in respect of:

Audit of financial statements of subsidiaries pursuant to legislation

138

120

Other services relating to taxation

96

104

Other advisory services

81

52

 

325

286

 

 

 

6              Profit before tax

Profit before tax is stated after charging:

2019

2018

 

£000

£000

Operating lease rentals for buildings

2,235

1,509

Equity-settled share-based payment charges

5,278

3,269

Exceptional items - warehouse relocation

6,667

-

Depreciation of property, plant and equipment

6,972

3,997

Amortisation of intangible assets

2,500

2,532

Amortisation of acquired intangible assets

4,449

4,449

 

The exceptional items relate to the additional costs of relocation of all the inventory held by PrettyLittleThing to a third-party managed warehouse in July 2018.
 

7              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.

 

 

2019

2018

Weighted average shares in issue for basic earnings per share

 

1,154,130,568

1,138,722,751

Dilutive share options

 

20,304,294

27,108,839

Weighted average shares in issue for diluted earnings per share

 

1,174,434,862

1,165,831,590

 

 

 

 

Earnings (£000)

 

37,772

31,652

Basic earnings per share

 

3.27p

2.78p

Diluted earnings per share

 

3.22p

2.71p

 

 

 

 

Earnings (£000)

 

37,772

31,652

Adjusting items:

 

 

 

Amortisation of intangible assets arising on acquisitions

 

4,449

4,449

Share-based payment charges

 

5,278

3,269

Exceptional items - warehouse relocation

 

6,667

-

Adjustment for tax

 

(3,050)

(1,408)

Adjustment for non-controlling interest

 

(2,335)

(352)

Adjusted earnings

 

48,781

37,610

Adjusted basic earnings per share

 

4.23p

3.30p

Adjusted diluted earnings per share

 

4.15p

3.23p

 

 

 

 

Adjusted earnings and adjusted earnings per share gives a more consistent measure of the underlying performance of the business excluding non-cash accounting charges relating to the amortisation of intangible assets valued upon acquisitions, non-cash share-based payment charges and other exceptional items.

 

 

8              Staff numbers and costs

The average monthly number of persons employed by the group (including directors) during the year, analysed by category, was as follows:

 

Number of employees

 

2019

2018

Administration

1,303

955

Distribution

885

1,220

 

2,188

2,175

 

The aggregate payroll costs of these persons were as follows:

 

2019

2018

 

£000

£000

Wages and salaries

62,505

49,510

Social security costs

6,419

5,553

Post-employment benefits

1,123

647

Equity-settled share-based payment charges

5,278

3,269

 

75,325

58,979

 

9              Directors' and key management compensation

 

2019

2018

 

£000

£000

Short-term employee benefits

10,616

5,856

Post-employment benefits

217

131

Equity-settled share-based payment charges

907

454

 

11,740

6,441

Directors' and key management compensation comprises the group directors and executive committee members.

 

10           Taxation

 

2019

2018

 

£000

£000

Analysis of charge in year

 

 

 

 

 

Current tax on income for the year

12,411

9,294

Adjustments in respect of prior year taxes

(54)

(1,323)

Deferred taxation

40

(658)

Tax on profit on ordinary activities

12,397

7,313

 

      

      

The total tax charge differs from the amount computed by applying the blended UK rate of 19.0% for the year (2018: 19.08%) to profit before tax as a result of the following:

 

 

 

Profit on ordinary activities before tax

59,856

43,313

Profit before tax multiplied by the standard rate of corporation tax of the UK of 19.0% (2018: 19.08%)

11,373

8,273

Effects of:

 

 

Expenses not deductible for tax purposes

454

375

Adjustments in respect of prior year taxes

(54)

(1,323)

Overseas tax differentials

5

9

Depreciation in excess of/(less than) capital allowances

619

(21)

Tax on profit on ordinary activities

12,397

7,313

 

Tax recognised in the statement of changes in equity

 

 

 

 

 

Deferred tax credit on movement in tax base of share options

3,342

1,823

 

No current tax was recognised in other comprehensive income (2018: £nil).

A change to reduce the main rate of corporation tax to 17% from 1 April 2020 was announced in the Chancellor's budget on 16 March 2016. Changes to reduce the UK corporation tax rate to 17% from 1 April 2020 were substantively enacted on 15 September 2016. The prior year tax adjustment is in respect of tax incentives for research and development expenditure.

 

 

 

11           Intangible assets

 

Patents and licences

Trademarks

Customer lists

Computer software

Total

 

£000

£000

£000

£000

£000

Cost

 

 

 

 

 

Balance at 1 March 2017

310

25,070

5,826

9,208

40,414

Additions

9

-

-

2,403

2,412

Disposals

-

-

-

(567)

(567)

Balance at 28 February 2018

319

25,070

5,826

11,044

42,259

 

 

 

 

 

 

Additions

307

-

-

2,930

3,237

Disposals

-

-

-

(2,096)

(2,096)

Balance at 28 February 2019

626

25,070

5,826

11,878

43,400

 

 

 

 

 

 

Accumulated amortisation

 

 

 

 

 

Balance at 1 March 2017

180

167

267

4,354

4,968

Amortisation for year

31

2,507

1,942

2,501

6,981

Disposals

-

-

-

(567)

(567)

Balance at 28 February 2018

211

2,674

2,209

6,288

11,382

 

 

 

 

 

 

Amortisation for year

74

2,507

1,942

2,426

6,949

Disposals

-

-

-

(2,096)

(2,096)

Balance at 28 February 2019

285

5,181

4,151

6,618

16,235

 

 

 

 

 

 

Net book value

 

 

 

 

 

At 29 February 2017

130

24,903

5,559

4,854

35,446

At 28 February 2018

108

22,396

3,617

4,756

30,877

At 28 February 2019

341

19,889

1,675

5,260

27,165

 

Within the statement of comprehensive income, amortisation of acquired intangible assets (trademarks and customer lists) of £4,449,000 (2018: £4,449,000) is shown separately. The amount of amortisation included in distribution costs is £648,000 (2018: £629,000) and in administrative expenses is £1,852,000 (2018: £1,903,000).

 

 

12           Property, plant and equipment

 

Short leasehold

Fixtures and fittings

Computer equipment

Motor vehicles

Land & buildings

Total

 

£000

£000

£000

£000

£000

£000

Cost

 

 

 

 

 

 

Balance at 1 March 2017

1,121

15,605

2,484

285

17,896

37,391

Additions

1,156

19,911

1,593

228

21,084

43,972

Disposals

(54)

(72)

(540)

(74)

-

(740)

Balance at 28 February 2018

2,223

35,444

3,537

439

38,980

80,623

 

 

 

 

 

 

 

Additions

3,896

36,775

1,575

115

1,269

43,630

Exchange differences

-

-

-

-

(73)

(73)

Disposals

(94)

(375)

(592)

(123)

-

(1,184)

Balance at 28 February 2019

6,025

71,844

4,520

431

40,176

122,996

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

Balance at 1 March 2017

437

2,702

1,511

122

600

5,372

Depreciation charge for the year

328

2,463

763

85

358

3,997

Disposals

(54)

(72)

(540)

(74)

-

(740)

Balance at 28 February 2018

711

5,093

1,734

133

958

8,629

 

 

 

 

 

 

 

Depreciation charge for the year

566

4,646

1,144

127

489

6,972

Exchange differences

-

-

-

-

(2)

(2)

Disposals

(94)

(364)

(592)

(51)

-

(1,101)

Balance at 28 February 2019

1,183

9,375

2,286

209

1,445

14,498

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 28 February 2017

684

12,903

973

163

17,296

32,019

At 28 February 2018

1,512

30,351

1,803

306

38,022

71,994

At 28 February 2019

4,842

62,469

2,234

222

38,731

108,498

 

The amounts of depreciation included in the statement of comprehensive income in distribution costs is £4,003,000 (2018: £2,440,000) and in administrative expenses is £2,969,000 (2018: £1,557,000). Depreciation of the automation equipment contained in the £37 million of additions to fixtures and fittings will commence in April 2019 when the assets are entered into service.
 

13           Investments

The subsidiaries held and consolidated in these financial statements are set out below:

Name of company

Principal activity

Country of incorporation

Address

Percentage ownership

ABK Limited

Holding company

Jersey

12 Castle St, St Helier, Jersey

100%

boohoo.com UK Limited

Trading company

UK

49-51 Dale St, Manchester

100%

Boo Who Limited

Dormant company

UK

49-51 Dale St, Manchester

100%

boohoo.com USA Limited

Dormant company

UK

49-51 Dale St, Manchester

100%

boohoo.com USA Inc

Marketing office

USA

3 West 13th Street, New York

100%

boohoo.com Australia Pty Ltd

Marketing office

Australia

468 St Kilda Road, Melbourne

100%

boohoo France SAS

Marketing office

France

15, rue Bachaumont, Paris

100%

PrettyLittleThing.com Limited

Internet fashion retail

UK

Wellington Mill, Pollard Street East, Manchester

66%

21Three Clothing Company Limited

Dormant company

UK

Wellington Mill, Pollard Street East, Manchester

66%

PrettyLittleThing.com USA Inc

Marketing office

USA

1209 Orange Street, Delaware

66%

Nasty Gal.com Limited

Trading company

UK

49-51 Dale St, Manchester

100%

Nasty Gal.com USA Inc

Marketing office

USA

6600 W Sunset Boulevard, Los Angeles

100%

Shanghai Wasabi Frog Boohoo Ltd

Dormant company

China

49-51 Dale St, Manchester

100%

 

 

14           Deferred tax

 

Assets

 

Depreciation in excess of capital allowances

Share-based payments

Total

 

£000

Asset at 1 March 2017

232

4,262

4,494

Recognised in statement of comprehensive income

(72)

234

162

Credit in equity

1,823

Asset at 28 February 2018

160

6,319

6,479

Recognised in statement of comprehensive income

(73)

32

(41)

Debit in equity

(2,404)

Asset at 28 February 2019

87

3,947

4,034

 

 

 

Liabilities

 

 

Capital allowances in excess of depreciation

Business combinations

Total

 

£000

Liability at 28 February 2017

-

(2,597)

(2,597)

Recognised in statement of comprehensive income

496

Liability at 28 February 2018

-

(2,101)

(2,101)

Recognised in statement of comprehensive income

(495)

494

(1)

Liability at 28 February 2019

(495)

(1,607)

(2,102)

 

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.

 

 

15           Inventories

 

2019

2018

 

£000

£000

Finished goods

66,806

48,248

 

The value of inventories included within cost of sales for the year was £393,766,000 (2018: £270,032,000). An impairment provision of £5,181,000 (2018: £4,150,000) was charged to the statement of comprehensive income. There were no write-backs of prior period provisions during the year.

 

 

16           Trade and other receivables

 

2019

2018

 

£000

£000

Trade receivables

14,201

13,381

Prepayments

5,126

3,658

Accrued income

386

460

Taxes and social security receivable

2,863

-

 

22,576

17,499

 

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.

 

 

The provision for impairment of receivables is charged to administrative expenses in the statement of comprehensive income. The maturing profile of unsecured trade receivables and the provisions for impairment are as follows:

 

2019

2018

 

£000

£000

Due within 30 days

7,943

7,411

Provision for impairment

-

(26)

 

 

 

Due in 31 to 90 days

7,972

6,304

Provision for impairment

(1,714)

(596)

 

 

 

Past due

295

339

Provision for impairment

(295)

(51)

Total amounts due and past due

16,210

14,054

Total provision for impairment

(2,009)

(673)

 

14,201

13,381

 

 

17           Cash and cash equivalents

 

2019

2018

 

£000

£000

At start of year

142,575

70,330

Net movement during year

55,350

72,638

Effect of exchange rates

(53)

(393)

At end of year

197,872

142,575

 

 

18           Trade and other payables

 

 

2019

2018

 

£000

£000

Trade payables

33,930

34,203

Amounts owed to related party undertakings

-

31

Other creditors

1,730

1,084

Accruals

81,930

41,378

Provision for liabilities

18,912

9,021

Deferred income

8,453

5,556

Taxes and social security payable

9,396

5,397

 

154,351

96,670

 

The fair value of trade payables is not materially different from the carrying value.

The provision for liabilities comprises:

 

Dilapidations

Returns

Total

 

£000

Provision at 1 March 2018

750

8,271

9,021

Movements in provision charged/(credited) to income statement:

 

 

 

Release of provision from prior year

-

(8,271)

(8,271)

Increase in provision in current year

18,162

Provision at 28 February 2019

1,550

17,362

18,912

 

 

19           Interest-bearing loans and borrowings

This note provides information about the contractual terms of the group's interest-bearing loans and borrowings, which are measured at amortised cost.

 

2019

2018

 

£000

£000

Non-current liabilities

 

 

Secured bank loans

4,764

7,146

Current liabilities

 

 

Current portion of secured bank loans

2,382

2,382

 

Terms and debt repayment schedule

 

 

 

 

Nominal

 

 

 

 

 

 

 

interest

Year of

2019

2018

 

 

 

Currency

rate

maturity

£000

£000

Secured bank loan

 

 

GB£

LIBOR + 0.95%

2022

7,146

9,528

 

The loan is repayable in instalments over the five years to 2022. The loan is secured by a debenture comprising fixed and floating charges over all the assets and undertakings of boohoo.com UK Limited of £131.7 million (2018: £99.4 million), including all present and future freehold property, book and other debts, chattels and goodwill, both present and future.

 

Movement in financial liabilities

 

2019

2018

 

£000

£000

Opening balance

9,528

11,910

Interest accrued

144

146

Interest paid

(144)

(146)

Capital paid

(2,382)

(2,382)

Closing balance

7,146

9,528

 

 

20           Share capital and reserves

 

2019

2018

 

£000

£000

1,163,143,830 authorised and fully paid ordinary shares of 1p each

(2018: 1,149,574,495)

11,631

11,496

 

During the year, a total of 13,574,314 shares were issued under the share incentive plans (2018: 3,451,205). On 27 February 2019, 31,223 (2018: 35,224) new ordinary shares were issued to non-executive directors as part of their annual remuneration.

The directors do not recommend the payment of a dividend so that cash is retained in the group for capital expenditure projects that are required for the rapid growth and efficiency improvements of the business and for suitable business acquisitions (2018: £nil).

 

 

 

21           Capital commitments

Capital expenditure contracted for at the end of the reporting year but not yet incurred is as follows:

 

2019

2018

 

£000

£000

Property, plant and equipment

-

27,999

 

22         Operating Leases              

The group has lease agreements in respect of property, plant and equipment, for which the payments extend over a number of years. The totals of future minimum lease payments under non-cancellable operating leases due in each period are:        

 

2019

2018

 

£000

£000

Within one year

1,966

1,028

Within two to five years

4,032

3,066

In more than five years

261

792

 

6,259

4,886

 

 

23           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 brand and trading name. 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 28 February 2019, there are no pending claims or proceedings against the group which are expected to have a material adverse effect on its liquidity or operations.


 

 

Appendix - prior period revenues by region

 

Revenue by period for the year to 28 February 2019 (FY19)

 

£'000

4m to 31 December

2m to 28 February

12m to 28 February

 

FY19

FY18

yoy %

yoy % CER

FY19

FY18

yoy %

yoy %

CER

FY19

FY18

yoy %

 

yoy %

CER

Total

328,231

228,215

44%

43%

133,375

88,710

50%

50%

856,920

579,800

48%

47%

 

 

 

 

 

 

 

 

 

Revenue by region

 

 

 

 

 

 

 

 

 UK

179,952

135,642

33%

33%

74,185

56,592

31%

31%

488,199

355,614

37%

37%

 ROE

44,431

28,232

57%

54%

19,443

10,258

90%

86%

115,124

66,281

74%

67%

 USA

70,427

39,618

78%

80%

27,664

13,475

105%

101%

166,262

92,690

79%

81%

 ROW

33,421

24,723

35%

32%

12,083

8,385

44%

44%

87,335

65,215

34%

30%

 

 

£'000

3m to 31 May

3m to 31 August

6m to 31 August

 

FY19

FY18

yoy %

yoy % CER

FY19

FY18

yoy %

yoy %

CER

FY19

FY18

yoy %

 

yoy %

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 %

CER

FY18

FY17

yoy %

 

yoy %

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 %

CER

FY18

FY17

yoy %

 

yoy %

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%

 


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