Essentially, we look out to FY23, where we are xpecting EBITDA of £20.8m. We apply an EBITDA multiple of 35 (typical of what was applied to ASOS and Boohoo at that stage of their development) to derive a future value of £731m, which we then discount back to today at 25% – a high rate to encompass all the risks faced in growing a business to that scale. That derives a value of £300m, or 74p per share on a fully-diluted basis.
The important information from Koovs’ FY19 results is not the results for the year but the trading since the company secured its additional financing. With Gross Order Value (GOV) up 104% in 1Q20, Koovs is once more showing the sort of growth associated with online success. FY19 itself was a lost year, as the company conserved cash while it successfully sought new investors; they eventually arrived– not only with money but with important synergistic benefits too. The GOV data is a function of being able to finance growth again. The benefits of the Future Lifestyle (FLFL) tie-up are still to come in additional distribution and improved buying.
The Board is pleased to report that the recovery experienced in the final three months of the last financial year has continued into the first three months of the current financial year with Gross Order Value up 104% ahead of the same period last year at £4.82m. This, coupled with the Future Lifestyle Fashion Limited ("FLFL") subscription agreement secured at an average price of 15 pence per share, ensures the business is well positioned to deliver on its growth strategy.
Lord Waheed Alli, Chairman of Koovs, commented: "Koovs is firmly back on track evidenced by the 104% growth experienced in Q1 trading. We are excited about the rest of the year, as we continue to invest in both marketing and our product range."