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(Alliance News) - boohoo Group PLC shares rose strongly on Tuesday morning, despite the fast fashion retailer revealing an annual loss, as it said it expects a strong rebound this autumn.
Shares in the London-based online fashion seller were 9.1% higher at 41.93 pence in London on Tuesday near midday. Earlier, they had risen as high as 45.02p. The stock remains down 47% over the past 12 months.
boohoo swung to a pretax loss of GBP90.7 million in the financial year that ended on February 28 from a profit of GBP7.8 million the previous year.
boohoo said the fall into loss was caused by a decline in sales, as well as freight and logistics cost inflation connected to the pandemic and labour and energy cost inflation.
Revenue sank by 11% to GBP1.77 billion from GBP1.98 billion in financial 2022, which boohoo blamed on a weak "macro-economic and consumer backdrop".
boohoo declared no dividend for financial 2023, saying it wants to retain cash for capital expenditure projects aimed stimulating rapid growth and increasing business efficiency.
Looking ahead, boohoo said it expects revenue to grow in the second half of 2024, although it said that this focus on making profitable sales will initially cause a decline between 10% and 15% in the first half of the next financial year.
Chief Executive Officer John Lyttle said: "Our confidence in the medium-term prospects for the group remains unchanged, and as we execute on our key priorities we see a clear path to improved profitability and getting back to double digit revenue growth."
Adjusted earnings before interest, tax, depreciation, and amortization declined by 49% to GBP63.3 million in the recent financial from GBP125.1 million in financial 2022. Gross profit margin was 50.6%, down from 52.5%, while adjusted Ebitda margin was 3.6%, down from 6.3%.
boohoo expects adjusted Ebitda to improve to between GBP69 million and GBP78 million in the new year, with an adjusted Ebitda margin of 4% to 4.5%.
"Looking ahead, we are investing for the future growth of this business with automation, local fulfilment capacity In the US and building global brand awareness," CEO Lyttle said.
By Will Neill, Alliance News reporter
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