Member Info for Peoplepower1

One of the quality measurements for Boohoo is its 5-year Return on Capital Employed (ROCE), which is 22.6%. Long-term, double-digit ROCEs can be a hallmark of companies with the power to grow very profitably.

High quality ROCE means these shares have the potential to deliver solid investment profits over many years.

Return on capital employed (ROCE) for past five years starting at 29 February 2020 was 27.89%, 28 February 2019 was 23.07%, 28 February 2018 was 21.98%, 28 February 2017 was 33,76%, 29 February 2016 was 20.38%

The best UK shares/businesses make excellent returns on the money they invest. In financial jargon, this is the return on capital employed (ROCE). Think of it as the interest rate that a company earns on its money, just like a rate you’d get in a savings account. Anything over, say, 20% is very good.

ROCE measures profits before interest and taxes and is more precise than return-on-assets (ROA) or return-on-equity (ROE), as it takes into account all money employed in generating profits.

Warren Buffett is a big believer in ROCE. So too are top fund managers Terry Smith and Nick Train. They know a company that’s able to compound in value by reinvesting profits can make you rich, even if you pay a high (but not excessive) price for its stock.

Online-only business model
Online is growing exponentially
Growing globally - USA, Europe, UK, Australia, sells to over 200 countries worldwide
Global fashion market worth £2,000bn, UK £71bn, USA £330bn, Europe £350bn, Rest of World £1,250bn
9 Brands covering age groups 16 to 40 and beyond
9 Brands covering different tastes, Boohoo, BoohooMan, Prettylittlething, Nasty Gal, MissPap, Karen Millen, Coast, Oasis, Warehouse
Each brand has its own management and design team to prevent overlapping
Each brand has its own website
Each brand is run like a standalone business
Fundamentals of the Boohoo group business are strong with increasing sales and increasing market share.
No debt, £350m net cash, over £150m in working capital, £150m in assets.
Total revenue and profit up every year for the last 5 years with forecasts suggesting even more this year, possibly 40% increase.
Boohoo's warehouses are able to support a business of up to £3bn revenue. So Boohoo are obviously expecting to get to £3bn revenue in the next couple of years.

Other factory partnerships are likely to follow – possibly even elsewhere in the UK where the dying embers of UK's old rag trade are fading. Lyttle says Boohoo has even considered buying warehouses for its supply manufacturers to shield them from fixed costs such as rent charges.

He says Leicester's factories – 'the most expensive by far' of all the world's factories he buys from – can replenish orders for just a few hundred items in as little as two days. That gives Boohoo the edge over rivals who import clothes from China. The six-week shipping journey can leave clothes 'out of fashion' even before they arrive onshore, Lyttle explains.

We want to be a truly global player.

In the past fortnight, he has also ordered factories supplying Boohoo to ensure workers have details of a confidential whistleblower hotline – something campaign group Labour Behind the Label recently said was an essential step to fixing Leicester's reputed shortcomings.

Lyttle says much of this, including the launch of an independent factory auditor Verisio to conduct spot checks, was planned before the recent bad publicity. But the efforts have clearly been given a new impetus.

Lyttle says: 'I think we can get on top of this. I mean, remember, this is the UK. This is not a country on the other side of the world. This is a city in the UK.'

Lyttle wants Boohoo to begin producing its own clothing with a local joint-venture partner as soon as September 2020. The ambition – almost unheard of in modern-day retailing in the UK – is to employ as many as 250 manufacturing workers on the site or open a temporary factory nearby if it cannot be readied soon enough.

Speaking to The Mail on Sunday through video link from his Manchester headquarters, the Boohoo boss explains: 'Number one: this factory is a commitment to UK manufacturing. But it's also about making sure we can support our growth with a level of in-house production.'

Lyttle also wants to demonstrate for the doubters it is possible to make clothing in the UK 'in a particular way' – which means without cutting corners or taking risks that end up with damaging headlines. The strategy would double-down on its UK production model and its reliance on Leicester.

Lyttle explains: 'Inditex have a number of joint ventures in Spain and in Portugal that they work with and that really help their flexibility – it's not dissimilar to that.

'Let's get this one up and running, prove the model. And then decide and see where we go from there. We're not manufacturers but we feel confident we can execute this and we can make this factory successful.'

In a radical plan, Lyttle wants to build a 'model factory' in Leicester. It is part of a strategy that he says could seek to emulate the success of £26billion Spanish fashion giant and Zara owner Inditex, which makes its own clothes so it can replenish stock more rapidly in its shops.

https://www.thisismoney.co.uk/money/markets/article-8559989/Well-build-Boohoo-factory-Leicester-end-storm-pay-says-boss.html

Read and learn about Boohoo factory.

BrassGemini - we know all about Matt Earl, he's been trying to make money from shorts on Boohoo for six months now. He's not to be believed. He's greedy and gets his facts wrong deliberately to scare holders.

Boohoo haven't done a RNS in the past, 2018 and 2017 when results were up more than 10% of expectations. They have only ever done a RNS once before interim results in September 2019. Boohoo have always liked to surprise on the day so why they did one last year, I've no idea, may have suited them to do so. Stop the speculation about a RNS. It's not going to happen.

arudge - it's more about protecting shareholders should there be a significant change downwards for a company and therefore a significant change downwards to the share price. It's not about changes upwards because shareholders will benefit from this.

No, they haven't arudge. In September 2018' interim results their revenue had increased by 50% when expectations were lower. No RNS was issued before the interim results date. Same for September 2017 when revenue increased by 106% much more than expectations and no RNS was released before the Interim Results.

arudge - for example, Boohoo never put out an RNS before the interim results in September 2018, 2017, 2016 when their sales had gone up. The only time they did it was last year September 2019. So don't expect the same this year.

arudge - I do know that, however, Boohoo haven't always put out a RNS in the past when their sales have gone up. So I don't think it's about sales going up, it's more about sales going down that would matter.

Stop expecting a RNS before 30 September 2020 and you won't be disappointed.

From the RNS on 28 July 2020:-

The Group will provide an update on the findings of the report with its half year results for the six months ending 31 August 2020 on 30 September 2020.

Nicksmith123 - any trades reported after the UT are late trade notifications and no-one knows whether or not they're buys or sells because no-one knows the time of the execution of the trade.

Classhero - My understanding is if results are better they don't have to issue a RNS, they can if they want. If results are worse then they must issue a RNS.

Scrambler - just because you don't care about other people and their money doesn't mean I'm like you. I do care about people and their money. I don't like JB's tactics.

Scrambler, it's called research. You can't do enough research before buying shares and when holding shares too.

For me, there won't be any news until 30 September 2020. Boohoo are not going to release anything before then because they want to do everything together. Best thing to do here is stop watching Boohoo and come back on 30 September 2020. That's what I'm doing.

https://www.youtube.com/watch?v=-7T-6XdiRTw&feature=youtu.be

Worth watching. I love reading the comments to these too because you can learn loads from them about supercapacitors.