Boohoo shares soar as revenue rises 97% to £580m

Shares of Manchester-based online fashion giant plc rose almost 20% after it said its revenue soared 97% to £579.8 million and profit before tax jumped 40% to £43.3 million in the year to February 28, 2018.

In its outlook and guidance, said trading in the first few weeks of the 2019 financial year has made a strong start. shares were up 19.5% to around 184p, giving the firm a current stock market value of around £2 billion.

“Group revenue growth for the next financial year (FY19) is expected to be 35% to 40% with adjusted EBITDA margin between 9% to 10% and capital expenditure of £50 million to £60 million,” said the firm.

“Looking beyond the current year we will continue to lead the market on value, service and proposition in all our key geographies.

“Whilst this will require a continued investment in people and infrastructure, we believe that the benefits of our investments in marketing and warehouse automation will generate economies of scale to allow us to drive sales growth of at least 25%, whilst maintaining a 10% EBITDA margin.”

Mahmud Kamani and Carol Kane, joint CEOs, said in a statement: “The group made great progress during the year, integrating a new company, PrettyLittleThing, and a new brand, Nasty Gal, into the boohoo group.

“Revenue from boohoo continued to grow strongly, whilst there has been an exceptional performance from PrettyLittleThing, and Nasty Gal exceeded our estimates in its first year.

“Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector.

“Our international business showed higher growth rates and we are pleased with its gathering momentum.

“Our strategy will remain focussed on providing the best fashion at great prices coupled with excellent customer service.

“To this end we have a plan of continuous investment in systems and technology to ensure we offer an optimal online shopping experience.

“International expansion will continue as we add more country-specific websites, refine our brands’ customer proposition and raise brand awareness through marketing and social media.

“Our extended distribution centre, which will have a significant element of automation to drive efficiency savings, is scheduled for operational use in early 2019.

“We have announced this morning that PrettyLittleThing is to move into its own warehouse in the first half of the FY19 financial year.

“This brings incremental sales capacity in addition to that in our Burnley operations, will help underpin our infrastructure needs and add further operational flexibility for the group.

“It represents a significant milestone as we develop a distribution network capable of generating £3 billion of net sales globally, in line with our vision to lead the fashion eCommerce market.”