The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Boohoo share price will be £8 to £10 in next couple of years and at least £36 in 10 years. Buy Boohoo shares up to £3.85 for a fantastic bargain.
I have held Boohoo since 2015 through every up and down. I have watched Boohoo come back from every down to go higher and stronger. I will be holding Boohoo for at least another 10 years. Onwards and upwards Boohoo.
gggg21 - excellent points. USA distribution centre to be decided in few months. Plus Boohoo are looking at buying failing brands in Europe and USA.
DavidLaw - maybe you could drop an email to Boohoo marketing about the problem.
Boohoo is the best UK growth share out there. Buying it up to £3.85 is a fantastic bargain. Share price will growth to £8 to £10 in next couple of years. In 10 years Boohoo share price will be at least £36.
https://finance.yahoo.com/news/edited-transcript-booh-l-earnings-083000575.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvLnVrLw&guce_referrer_sig=AQAAANhX9i-xbvsFSoiAdp9PJD5oP0WaSRmffLtFK1VVRSmwEFecVpvXpX2Q5qpzOFr6dhuUQdLaRREkp8zZLBQ8eM1jYT2B6v-vfBiso9Tz3KNuEiYhwRMI1VVHP58xKi5ymjnFLr67bGXw3iQryyXLbJH8637OQFd7p4Ueisn35sX4
This is the transcript from the investor call this morning. 2 points that haven’t been discussed much 1) USA distribution hub coming in the next few months 2) acquisition hunt, looking in Europe and USA and opportunities will arise.
During the Boohoo webinar, it was stated that September 2020 growth has been excellent too.
Revenue for H1 which is 1 March 2020 to 31 August 2020 for Boohoo was up 45% to £816.5m.
Gross Margin up 70bps to 55%.
Adjusted profit before tax up 53% to £79.4m.
Downside risks mentioned were;
Possible downturn in consumer demand in H2 which is 1 September 2020 to 28 February 2021
Returns rate going back to normal levels, return rates have been very low
Carriage costs increasing in some overseas markets for the posting of items to international customers
Higher marketing costs in H2 (although that is what drives higher sales, so isn't necessarily a negative)
Higher capex, i.e. capital expenditure, to continue more automation of Burnley warehouse, to automate Sheffield warehouse, and other IT spend, will make decision in next couple of months about an international distribution centre
Sparkling results today, from Booho multi-brands (9 at the last count) fashion eCommerce business. The share price anticipated these numbers, as well as brushing aside the supply chain review published recently. That particular teacup has now recovered from storm conditions, despite some journalists' attempts to stir it up as much as possible.
Note that the allure of cheap fast fashion has clearly overwhelmed customers worrying too much about where or how the product is made. Rightly so, as practically the whole sector uses cheap labour from abroad, Bangladesh, etc. Arguably machinists allegedly working in Leicester for low wages because they're simultaneously claiming benefits, is a far more ethical setup than a sweatshop with fire exits chained shut in Bangladesh, and machinists being paid 50p per hour there. But we could discuss that ad infinitum, let's get back to the figures.
The growth is highly impressive, given that Boohoo is now a sizeable group.
Note the gross margin is strong, and has gone up a bit. There's some wholesaling activity, which is lower margin, so the retail only margin will be higher still than the reported 55% total.
Looking back at the Q1 (Mar-May) trading update published on 17 June 2020, it also reported +45% revenue growth. That was during lockdown though. Hence there was a question mark over whether Q2 would see growth slowing, given that physical shops re-opened. That BOO maintained +45% growth, despite its competitors coming back, is really impressive. BOO seems to have generated its own momentum, and doesn't seem to be affected by what the High Street does.
Guidance is raised for the full year, FY 02/2021;
Group revenue growth for the year to 28 February 2021 is expected to be 28% to 32%, up from approximately 25% as previously guided, with adjusted EBITDA margin for the year at around 10%, increased from the 9.5% to 10% as previously guided. The group has made a good start to the second half of the year, with momentum continuing into September...
That bar looks set low, because H1 revenue is up 45%, hence 28-32% full year implies a big slowdown in growth in H2. History shows that BOO tends to under-promise, and over-deliver.
Its test & repeat model means that supply can be quickly adjusted not just to fashion trends, and repeat orders for bestsellers, but also can be quickly adjusted according to overall macro conditions. Compare that with the big problems physical retailers have with planning product deliveries months in advance.
The webinar was really excellent, covering a lot of stuff about the new brands acquired, supply chain & margins, etc. Basically what I've been saying here all along is correct - that margins in Leicester are worse than from overseas factories, but it's used for speed & convenience. It's obvious management are very serious about fixing the supply chain problems in Leicester. So that's a dead issue now in my view.
I watched the trading update today through the video webcast given by John Lyttle CEO, Neil Catto, Finance Director and Carol Kane, one of the Boohoo founders.
Great presentation about the future and being a force for good for the UK textile manufacturing suppliers. And they'll do it. I have held Boohoo since 2015 and they're great at learning from their mistakes and putting them right and better. They've never been afraid to look at what's wrong and putting it right. Hence the Alsion Levitt QC Independent Review. No other UK clothing retailer have ever done this anything like this before. Boohoo are always ahead of the game when it comes to doing anything. Boohoo will fix the suppliers' problems and will do a great job of it.
Paul Scott was a Finance Director for clothing retailers before leaving to become a private investor and writing for the likes of the Small Cap Value Report for Stockopedia. Paul Scott holds Boohoo shares. Here is his opinion from today on Boohoo:-
My opinion - super-bullish, as I've been constantly saying here in recent months. I see this as a unique business, with unstoppable momentum in trading, and expansion. The multi-brand approach, and soaring international sales (now nearly half the total, and growing faster than the UK), mean that this is an almost unique growth proposition.
I think this is a hold forever position for me now, irrespective of valuation. Even if the valuation does become stretched (which it isn't now, in my view), then the group grows into it so fast, that pullbacks are just pauses in the bigger picture.
Ignore the background noise, and focus on the company's strong fundamentals.
I think it's heading for 10p per share EPS, and probably double that within another 2-3 years. Hence I reiterate my view that this share could be worth 800-1000p in the medium term.