Member Info for Peoplepower1

Taken from the Trading Update on 16 December 2021:-

Notice of trading update

The Group intends to provide a trading update for the year ending 28 February 2022 in early March 2022.

Some posters on here think there will be a trading update on 14 January 2022, there won't be a trading update on 14 January 2022.

Read the Trading Update in full from 16 December 2021.

WolfofWarks - you certainly know how to play with figures by going back to 2020 and not looking at the cash spent from the trading update on 14 January 2021 to the trading update on 16 December 2021.

By doing this you've managed to make Boohoo's figures look good - naughty, naughty WolfofWarks

You forgot to add the fundraising by Boohoo in May 2020. The rest of the PLT acquisition was also in May 2020, nearly two years ago.

Boohoo have spent a fortune since their update on 14 January 2021. The acquisitions of Debenhams was £50m, the others about £10m, the office block was £73m so that's £123m they have £70m net cash as of 16 December 2021 which is £203m and they had £345m net cash in the trading update of 14 January 2021. That's £142m spent in the past year on marketing, infrastructure, supply chain costs, returns, etc.

Boohoo will need another fundraising to survive. Marshall Wace and Co know this. Norges Bank have trillions to invest so what's £100m to them, they can afford to wait 10 years or more for a return on their investment.

The bottom line is Boohoo is running out of money and the shorters know this. Look out for another fundraising to come, maybe May 2022, maybe before May 2022.

A fundraising is the only way Boohoo can get a warehouse in the USA.

RichTheNewbie - let's not look at the numbers because they're too frightening to contemplate.

Boohoo is running out of money, that's the bottom line.

Christmas/New Year will be poor, January will be poor, February will be poor, March may catch up providing there's not a new Covid variant and holidays are allowed.

cooler- if you look at the operating cash flow from September 2020

Robust balance sheet with net cash of £344.9 million (2019: £207.3 million), healthy operating cash flow of £147.2 million (2019: £55.9 million) and net cash flow of £99.5 million (2019: £15.5 million)

And September 2021

Robust balance sheet with net cash of £98 million (1H21: £345 million), healthy operating cash flow of £21 million (1H21: £147 million) and net cash outflow of £128 million, after capital expenditure of £172 million (1H21: inflow £100 million)

operating cash flow from September 2020 went down from £147.2m to £21m in September 2021 so operating cash flow doesn't look good also for Boohoo Group.

So £70m net cash with spending at about £14m a month will last for only 5 months. Operating cash flow of around £20m isn't going to save the Boohoo Group from needing to borrow more money.

Yes, Boohoo Group can sell and lease back the London office which will give them maybe another £70m, maybe less £60m, £50m. This will last maybe another 4/5 months at £14m a month. What if their operating cash flow doesn't increase significantly during 2022?

Pandemic costs, returns, net cash running out, operating cash flow stagnant, higher employee costs, higher marketing and infrastructure costs.

cooler- from trading update on 14 January 2021

Net cash of £386.9 million (31 August 2020: £344.9 million), providing financial flexibility to support future growth

So Boohoo spent £316.5m from trading update on 14 January 2021 to trading update on 16 December 2021 leaving the Boohoo Group with £70m net cash from their trading update on 16 December 2021.

In 10 months the Boohoo Group spent £246.5m, an average of near enough £25m a month.

Since September 2021 spending has gone down to £14m a month.

So how long is £70m net cash going to last the Boohoo Group?

cooler - from final results for year ended 28 February 2021

Robust balance sheet with net cash of £276.0 million (2020: £240.6 million). High cash generation with operating cash flow of £201.1 million (2020: £127.3 million). £195.7 million capital raised.

cooler - from trading update on 15 June 2021

Net cash of £199.1 million (28 February 2021: £276.0m, reflecting £143.5m of investments across offices and infrastructure)

The Boohoo Group had net cash of £199.1m on 15 June 2021 which went to £98m on 30 September 2021, a spending of £101m over 3 months, ie. £34m a month.

cooler - From interim results on 30 September 2021

Robust balance sheet with net cash of £98 million (1H21: £345 million), healthy operating cash flow of £21 million (1H21: £147 million) and net cash outflow of £128 million, after capital expenditure of £172 million (1H21: inflow £100 million)

So £172m was spent on capital expenditure, i.e. capex. including net cash outflow of £128m

Net cash went from £98m on 30 September 2021 to £70m on 16 December 2021 - spent £28m in about two months, £14m a month.

Looks like net cash went from £345m for the first half of 2021, half yearly results to £98m on 30 September 2021, wow, so £247m was spent from trading update on 30 June 2021 to 30 September 2021, in three months more than £80m was spent a month.

£70m net cash and spending £14m a month at present means it will last for 5 months. Will certainly need plenty of cash flow over next six months and beyond.

Will the Boohoo Group have to borrow money to keep going?

cooler - great question.

From what I can see, there was £70m on London Office, £20 million pandemic related costs, £33m on warehouse and marketing which all adds up to £123m and then £70m net cash is £193m.

Where has the rest gone, ie, £207m, hopefully not solely on returns?

Dan1605 - from the Trading Update on 16 December 2021:-

Guidance and Outlook

For the year ending 28 February 2022, the Group now expects net sales growth to be 12% to 14%, compared to previous guidance of 20% to 25% growth. This reflects our expectation that the factors impacting our performance in the Period persist through the remainder of the financial year, and recent developments surrounding the Omicron variant could pose further demand uncertainty and elevated returns rates particularly in January and February.

Adjusted EBITDA margin for the year is expected to be 6% to 7%, compared to previous guidance of 9% to 9.5%, implying adjusted EBITDA of between £117 million to £139 million. This is due to significantly higher returns rates impacting net sales growth and costs, with continued extended delivery times impacting international demand, consequently driving lower returns on marketing expenditure, and significant ongoing pandemic-related inbound freight cost inflation.

Ade1234 - if you sell for a profit then you have to pay Capital Gains Tax if the profit you've made overall from all your shares in that year is more than £12,000.

I hope I've got that right.

On the whole, AIM shares are treated just the same as those on the Main Market, in that income generated through dividends is taxable, and gains are subject to Capital Gains Tax (CGT) - from the link

As I understand it from this article, if you hold AIM Shares outside of an ISA then you have to pay capital gains tax on any gains you make over the Capital Gains allowance of £12,000 per year.

I would think the same for losses in any year and not after one year.

https://aim-watch.com/project/aim-tax-benefits/

Angelis - and future losses too.

Angelis - from Boohoo's most recent trading update:-

Net sales impacted by returns rates that are 12.5 percentage points higher than last year, and 7 percentage points higher than pre-pandemic levels driven by an exceptionally high dress mix

Angelis - read Boohoo's most recent trading update and learn.

Angelis - nobody is buying because of Omicron. They're not going out so they don't need party outfits, going out outfits, etc., etc. It's not about being online. Hence why all the dresses were returned to Boohoo as stated in their recent Trading update.

Expectations that lower consumer spending will drive an economic contraction in December and January have been fuelled by a drop in restaurant bookings and coffee shop spending in the UK due to the Omicron variant.

If people aren't going out, then they're not buying clothes to go out. All the retailers including online will have bought loads of stock early for Christmas thinking there was going to be a bumper Christmas and guess what, there's no bumper Christmas because of Omicron.

Angelis - because of Omicron and no-one going out or having Christmas parties, they're not buying, even online.

No-one on here has thought of Boohoo having too much stock for all its brands and not just Boohoo.

Overstocked for Christmas because of the supply chain problems. For me, this will be the problem for Boohoo and all retailers who got loads of stock in September/October thinking there was going to be a bumper Christmas and along came Omicron.