Night night all see you bright and early tomorrow....31 Oct 2021 21:58
I'm going to show you exactly what shorters and bears are hanging on to - the below statement ....
"Adjusted EBITDA at £85m, remains robust and represents an increase of 40% since 1H20. This is however slightly lower than the exceptional levels of profitability achieved in the first half of the prior financial year. Profitability was impacted by a number of cost headwinds driven by short-term factors largely relating to the pandemic and our investment as we scale our newly acquired brands. These include: increased marketing investments in key markets and our new acquisitions, two warehouse operational moves, returns rates normalising and materially higher shipping costs. COVID-19-related distribution cost increases totalled approximately £26 million in the first half, or 270 basis points of margin."
When you look at the statement there is a very big clue as to what is happening "Profitability was impacted by a number of cost headwinds driven by short-term factors largely relating to the pandemic and our investment as we scale our newly acquired brands. These include: increased marketing investments in key markets and our new acquisitions, two warehouse operational moves, returns rates normalising and materially higher shipping costs." The costs/headwinds were largely down to scaling the business and newly acquired brands - The company has already given us 20 percent growth in the first half with "challenging covid conditions" and H2 is already ahead of H1 so we know the are above 20 percent growth for the second half of the year.
Also worth noting this comment from h1 results "consumer uncertainty in markets that we operate in resulting in the loss of key events and holidays". So they achieved 20 percent growth with key holiday dates missing and covid related issues.
That's it right there - people are completely ignoring the last 8 years of growth plus progress made through the pandemic - At quite possibly the most challenging time in many generations boohoo have managed to acquire 4 to 6 extra brands whilst moving to bigger warehouses and dealing with all the supplier problems and still growing the company!!
Since 2019 boohoo have guided 25 percent year on year growth in revenue but in fy20 they gave a staggering 41% which took revenues from 1.2(fy19) to 1.75 billion. this year we are on target for revenue of 2.18 billion giving 25 percent growth - admittedly profits are going to be down for this year due to major investments in the business for future growth.
When you combine the exceptional growth of fy20 @ 41% with a fy21 of 25% it means we will come out of the pandemic still ahead of yearly guidance of 25 percent.
Fy22 will be the year that the market wakes up and believes the story - everything is in place from brands to infrastructure....
Xmas 2022 people will be devastated they didn't buy at these silly levels.
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