Boohoo is a growth stock17 Jul 2020 10:24
Today it said: "The group continues to appraise opportunities and will update shareholders in due course. We finished the quarter with in excess of £350 million of net cash on our balance sheet."
Chief executive John Lyttle added: "Whilst there is a period of uncertainty within the markets in which we operate, the group is well-positioned to continue making progress towards leading the fashion e-commerce market globally."
Trading had been "very strong" in the first quarter of its year, leading the group to predict "another year of strong profitable growth, and ahead of market expectations". Sales in the three months to 31 May leaped from £254 million a year ago to £367.8 million as shoppers flocked online during the lockdown. Of that 45% leap, UK sales were up 30% to £183 million, while its second biggest market, the US, was up 79% to £92 million.
Conditions would be highly competitive amid consumer uncertainty and big promotions in its markets. Despite that, it forecasts 25% revenue growth at profit margins increased from 9.5% to 10% as it pushes more sales through its efficient business platform.
Boohoo will continue to invest heavily in its systems, with capital expenditure of £60 million to £80 million in the year, which runs to 28 February 2021.
In a note to investors titled "Smashing expectations", stockbroker Jefferies praised the new trading figures and said: "We see the acquisition of Oasis and Warehouse as a low risk and likely high returning opportunity, one that provides further evidence of the long-term potential in boohoo's multi-brand platform."
Analyst Andrew Wade and Daniela Almeida wrote that Boohoo's figures for the first quarter of the year had been well ahead of the City's forecasts, in part because of restrained language from management at the last set of results in April.
"The result clearly demonstrates the virtues of boohoo's nimble model - leveraging its flexible supply chain, and rapidly evolving both marketing content and product ranges to drive superior growth."
[Source] https://www.standard.co.uk/business/boohoo-reports-very-strong-trading-and-buys-oasis-and-warehouse-a4471096.html
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