Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
For Boohoo, yes that is true. But Boohoo's growth has been slowing compared to PLT, whose demographic is firmly 16-24. I think PLT represents BOOs best chance for US growth as well, as I think its a stronger brand than Shein
Hi all,
Considering opening a position in ASOS, however was hoping someone invested could explain what happened in March 2020 when the price dropped to almost £10 a share. Is this due to the high institutional float or was just a Covid Sell off?
Agree with you here. Not only this, but wage inflation could hit margins. From what I could find around 85% of production has been outsourced to Asia. While BOO plans to move production back to Leicester in the long term, I can't see this until FY25. However, I think the market has priced in this risk into the equity (test and repeat model failing). Supply chain issues should ease once passenger flights resume, and I think we have passed the peak of pressures. Also in a recessionary environment, BOO has a far stronger model than competition, mostly due to its balance sheet.
Can we also dispel the Primark thing. Boohoo targets the age demographic 16-24. Kallumama, I'm not sure you understand this. Primark isn't taking away BOO's market share. It has little bearing on their revenue. PLT makes up the primary share of BOOs UK growth. If you are going to talk about competition, talk about I Saw It First and Shein.
This is simply short term sentiment. To get a growth stock at a sub 20 P/E is a good buy. The volatility is being designed by algos. All this sentiment is a chance to get this at a great margin of safety for the long term
Hi all,
Relatively new to this forum, so I thought I'd give my opinion on the equity.
Firstly, many people here seem to be concerned with the daily share price movement. The three month average for volume is around 12m shares. However at the moment, volume is around 7m. Therefore I think a fair assumption to make is that the share price is being dominated by 'smart money'. Consequently the price could go to 80p or 150p in the coming months. At the end of the day, who cares? The market acts as a weighing machine in the long term, and barring extreme consumer changes, in my bear case BOO will be worth around 300p a share.
Onto the valuation. I think BOOs fundamentals have been covered well here.
- Historical Financials are strong esp. revenue growth
- Low debt
- Historical Gross Margin better than competition
However, as pointed out there are problems. My take on the London head office is that it shows the ego of management. Personally, I think this is MK rather than JL. The fact they didn't allocate capital towards a US distribution centre shows their complacency and arrogance. Hopefully this has taught them a valuable lesson for the future. While this is a negative, I don't think it is as extreme as some have made out. Supply Chain issues should ease in FY24 and net margin should return back to normal.
Onto the labour scandal in Leicester. For me, this poses the most significant threat to BOO, and was why I initially was reluctant to build a position. The conscious consumer has grown in BOOs demographic and with social media, activism is far more accessible now. Long term, I think BOO could struggle. Their test and repeat model isn't sustainable and consumers are more open to cutting back on consumption, choosing to shop vintage. However I think this is an excellent medium term investment, with 200 / 300% upside.
Debenhams and other acquired brands will be able to offset slowing growth in PLT and Boohoo. This is assuming consumer behaviour changes, of course in a bull scenario, US growth matches the UK and this sits at £10/£15 a share in FY27.
At the moment the share price provides me with a good margin of safety, and with significant upside, I think this is a buy at the moment.