Boohoo Group plc (LON:BOO) has announced its final results for the year ended 28 February 2021.
| 2021 | 2020 | Change | |
| £ million | £ million | ||
| Revenue | 1,745.3 | 1,234.9 | +41% |
| Gross profit | 945.2 | 666.3 | +42% |
| Gross margin | 54.2% | 54.0% | +20bps |
| Adjusted EBITDA(1) | 173.6 | 126.6 | +37% |
| % of revenue | 10.0% | 10.2% | -20bps |
| Adjusted EBIT(2) | 149.3 | 107.0 | +40% |
| % of revenue | 8.6% | 8.7% | -10bps |
| Adjusted profit before tax(3) | 149.9 | 108.3 | +38% |
| Profit before tax | 124.7 | 92.2 | +35% |
| Adjusted diluted earnings per share(4) | 8.67p | 5.88p | +47% |
| Diluted earnings per share | 7.25p | 5.35p | +36% |
| Net cash(5) at yearend | 276.0 | 240.6 | +£35.4 million |
Financial highlights
· Revenue £1.745 billion, up 41% (41% CER(6))
· Strong revenue growth across all geographies with UK up 39% and international up 44%. International revenue is now 46% of total, up from 45%
· Gross margin 54.2%, up 20 bps
· Adjusted EBITDA £173.6 million up 37%, with Adjusted EBITDA margin of 10.0% (2020: 10.2%), notwithstanding COVID-19 cost headwinds and significant investment in acquisitions
· 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.
Operational highlights
· Significant group-wide progress made on Agenda for Change programme, which has independent oversight from Sir Brian Leveson
· Strengthening corporate governance through a new non-executive director appointment, establishment of a Risk Committee and committed in excess of £10 million in supply chain monitoring and compliance
· Successful integration and re-launch of Oasis and Warehouse brands on our multi-brand platform
· Acquisition of Debenhams online business and investing to transform the business into a digital department store with significant potential
· Acquisition of Dorothy Perkins, Wallis and Burton brands, adding to the group’s diversity and reach
· Third distribution centre on track for operational use in spring 2021 and long term lease agreed for fourth distribution centre, expected to go live in the second quarter of the new financial year
· 18 million active customers, up 28%
· Over 1,000 jobs secured through recent acquisitions
Outlook and guidance
As always, our focus is to maintain an outstanding customer proposition, with the latest fashion at great prices, combined with excellent customer service. To this end, we have a plan of continuous investment in our systems, infrastructure and technology to ensure we offer an optimal online shopping experience as we look to further cement our position as a leader in global fashion e-commerce.
Revenue growth for the full year to February 2022 is expected to be around 25% at a group level, with newly-acquired brands expected to deliver approximately five percentage points of this growth. Growth within our established brands remains strong and over the last two years we have achieved a revenue CAGR of 42%. Trading in the first few weeks of the financial year has been encouraging, however, the economic outlook remains uncertain and we expect the benefits seen from reduced returns over the last twelve months to begin to unwind this year, whilst still experiencing significantly elevated levels of carriage and freight costs.
Whilst the group did see some benefits to demand in the last financial year due to lockdowns around the world, traditional core categories such as dresses and going out saw significant declines. As markets re-open we are already seeing the early benefits of this and believe that the strengths of our test and repeat model and platform leave the group well-positioned to capitalise on any rebound in key geographies as markets exit lockdown globally.
Margins for established brands are expected to be in line year on year. We expect investment in newly-acquired brands to dilute the group’s overall adjusted EBITDA margin by 50-100bps, with the group’s adjusted EBITDA margin expected to be in the region of 9.5-10% for the full year.
Adjusted EBITDA is likely to see more of a weighting towards the second half of the year, reflecting a strong comparative period in the first half. This is consistent with financial years prior to the one herein reported, and the group expects a higher adjusted EBITDA margin in the second half, reflecting investments in our scalable multi-brand platform.
As announced on 12 April 2021, the group acquired a new office in the heart of London’s West End for £72 million. Capital expenditure for the remainder of the financial year is expected to be in the region of £125-175 million. This relates to growth investments in our new warehouse sites in Wellingborough and Daventry, as well as continued enhancements to our existing facilities, including automation at our Sheffield site to increase both capacity and efficiency.
We are focused on building the business for the future and continued investment in our brands, infrastructure, people and technology will drive this growth and further economies of scale. We are also committed to continued improvements across our environmental responsibilities and to accelerate our sustainability journey. The group’s medium-term target of sales growth of 25% per annum and an adjusted EBITDA margin of around 10% remains unchanged.
John Lyttle, CEO, commented:
“FY21 has been a year of significant investment for the group as we build a platform for the future and I am very pleased to report a strong financial performance. Our established businesses have continued to grow across all territories as we gain market share with our compelling consumer proposition. We completed over £250 million of acquisitions in the period, which included Oasis, Warehouse, Debenhams, Dorothy Perkins, Burton and Wallis, as well as the purchase of the remaining minority interest in PrettyLittleThing in a transaction that to date has resulted in substantial earnings enhancement for the group’s shareholders. Our newly-acquired brands are being re-energised and made relevant for today’s consumer across a broader market demographic. We are very excited about their potential and are already seeing the early rewards from their growth. We have also invested in improving the oversight and transparency of our supply chain and we are committed to embedding positive change through our ambitious UP.FRONT sustainability strategy. As we build for the future, we continue to invest across our platform, people and technology to further cement our position as a leader in global fashion e-commerce.”
Mahmud Kamani and Carol Kane, Group Co-Founders, commented:
“Over the last year the group has made great progress, delivering another set of record results despite the challenges posed by the COVID-19 pandemic. We have made significant progress on our Agenda for Change programme, with greater oversight of our supply chain, stronger governance and more transparency. We are embedding a new way of working and improving the sustainability of the group for the benefit of all stakeholders. We have also announced separately this morning the addition of Tim Morris to the board as a non-executive director and look forward to the expertise he will bring to the group. We would like to thank Pierre for his contribution over the last four years. Heading into the new financial year, we are excited about the global opportunities for our brands as we build for the future and invest in enhancing our technology and platform to allow the group to deliver on its growth potential.”
Investor and analyst presentation
A webcast for analysts will be held today commencing 9.00am (UK time). To access please click the link below:
https://webcasting.buchanan.uk.com/broadcast/608837210386285386ccb8d9
A replay will subsequently be available on the boohooplc.com website from 12 noon via the same link.
