Boohoo raises forecast as profits soar
Boohoo has reported that pre-tax profit soared by 51% to £68.1m in its latest half-year results.
In addition, revenue soared by 45% to £816.5m in the six months ended 31 August 2020.
Strong revenue growth was seen across all geographies and brands, with revenue up by 37% in the UK and 83% in the US. Its international business now accounts for 47% of group revenue, with total international revenue up by 55% in the period.
It comes as the online retailer said that new customer acquisition in Q1 was driven by the pandemic’s impact on consumer behaviour, with more customers turning to online purchases during lockdown.
In light of these results, group revenue growth for the year to 28 February 2021 is expected to be between 28% and 32%, up from the previously guided 25%.
The group added that it has “made a good start” to the second half of the year, with momentum continuing into September.
Nonetheless, the retailer said it is “prudent” to continue to plan for a period of economic uncertainty in the second half of the year, including possible reduced consumer spending.
Capital expenditure is also expected to be higher than previously anticipated, in the region of £80m to £100m, reflecting increased investments across the business.
John Lyttle CEO, said: “There are many challenges still ahead due to uncertainties posed by the Covid-19 pandemic, but despite these challenges there are many positives from our activities in the first half.
“The resilience of our business model and the commitment and flexibility of our colleagues and partners has enabled us to continue to operate our business successfully. We are grateful to all and pleased to be able to report a strong performance with continued high growth rates in revenue and strong profitability.”
He added: “We also acquired two new well-known women’s brands, Oasis and Warehouse, and we acquired the remaining minority interest in PrettyLittleThing, all of which will support our continued growth and profitability.
“The group has continued to gain market share in all key markets and we remain optimistic about the group’s prospects with the belief that it is well-positioned to continue making progress towards leading the fashion e-commerce market globally.”
The half-year results closely follow the publication and response to an independent review of Boohoo’s UK supply chain. The review’s aim was to “consider boohoo’s obligations and duties of care in relation to the workforce in its Leicester supply chain”.
The retailer first announced it would be launching the independent review in July following revelations of poor working conditions in a Leicester warehouse, after a Sunday Times exposé highlighted the conditions at supplier Jaswal Fashions in an undercover report.
The report “identified many failings” in the Leicester supply chain and recommended improvements to boohoo’s related corporate governance, compliance and monitoring processes.
