BOOHOO Group Plc, UK’s leading retail online fashion group is trading near its life-time high

  • Dec 04, 2019 GMT
  • Team Kalkine
BOOHOO Group Plc, UK’s leading retail online fashion group is trading near its life-time high

Alternative Investment Market-listed Boohoo Group Plc is the UK’s 7th largest retailer in terms of the market capitalisation. The outstanding market capitalisation of the group stood at £3.57 billion, with 1.16 billion shares on issue.

The group was founded by visionary founders Mahmud Kamani and Carol Kane in the year 2006 and headquartered in Manchester.

As on date, the group is catering customers around the globe with a significant presence in the UK, US, Europe and Australia, through its leading brands like boohoo, boohooMAN, PrettyLittleThing Nasty Gal, MissPap, Karen Millen and Coast design.

In the year 2016, the group diversified into menswear through the launch of boohooMAN and scaled up menswear segment through the acquisition of leading fashion brands like Pretty Little Things in January 2017 and Nasty Gal, a California-headquartered brand in the February 2017.

Key fundamental facts (in £ millions)

Source: boohooplc.com

In the past five years, the group's sales have recorded a massive growth and increased with a compounded average growth rate (CAGR) of 57.3%. Also, on a YoY basis, the group has recorded aggressive growth as in from 2017 to 2018, sales surged by an unexpected growth rate of 97% and from 2018 to 2019, sales surged by 48%.

In the period under consideration, adjusted EBITDA clocked a CAGR of 57%, and in the FY19, group’s Adjusted EBITDA surged by 49% on a Y-o-Y basis.

However, it missed maintaining an adjusted EBITDA margin above 10% consistently over the past five years. The margin expanded marginally in the FY19 by 10 basis points to 9.9% against the year-over period.

Group’s net cash position has grown with a CAGR of 37% in the five years.

Recent Trading Update:

In the recent trading update reported by the group as on December 03, 2019, the group announced that its trading remained firm across the group's leading brands in the first half of the FY20. Also, it experienced record performance across the leading brands during the Black Friday weekend.

It also notified that the group has successfully integrated its new brands like Karen Millen, Coast, and MissPap with its online platform.

The overall performance of the group in the first half of FY20 was broadly in line with market expectations.

*The group is due to report its financial information for four months to December 31, 2019, in January 2020.

Latest Financial Highlights: H1FY20

Recently, as on September 25, 2019, the group reported its interim results for the six months ended as on August 31, 2019.

During the first half of FY20, the group’s revenue went up to to £564.9 m and recorded a growth rate of 43% against £395.3 m reported in the year-ago period. The growth was supported by a 34% revenue growth in the group’s boohoo brand to £281.0m, with a gross margin of 53.6% ,up 20bps on a YoY basis; PrettyLittleThing revenue surged 41% to £237.6m with a gross margin of 55.3%, down 200bps on a YoY basis and Nasty Gal revenue recorded a massive growth of 148% to £43.9 million with a gross margin of 54.2%. However, gross margin tanked 480 basis points against the year-ago period.

From the geographical standpoint, in the UK it recorded a growth of 35% and international sales surged by 55% on a YoY basis, and now international sales account for 44% of the total group revenue against 41% it contributed in FY19.

Group’s adjusted EBITDA posted a stellar growth of 53% on a Y-o-Y basis to £60.7m against £39.6m posted in the same period of the previous financial year, with adjusted EBITDA margin stood at 10.8%, up by 80bps on a Y-o-Y basis.

Its pre-tax profit soared by 83% on a YoY basis to £45.2m, with adjusted diluted earnings per share increased by 46% to 2.91p/share and diluted earnings per share surged by 78% to 2.48p/share respectively.

In the H1FY20 interim announcement, the group provided full-year guidance for FY20, ending on February 29, 2020. It stated that sales growth for the FY20 would be in between 33% to 38% and adjusted EBITDA margin to be near about 10%, because of investment into recently acquired three brands in the first half of the FY20.

Shares of BOOHOO Group Plc are trading near life-time high.

Recently, as on November 29, 2019, shares of BOO registered 52w-week and a life-time high of GBX 316.9. On a YoY basis, shares of BOOH delivered a spectacular price return of 57.5%, up by 89.6% on a YTD basis, surged approximately 31% in the past three months and bagged around 17% in a month time, respectively.

In the past 5-years, its shares have created a fortune for its shareholders as its shares have recorded a strong rally and delivered a compounded average growth rate (CAGR) return of 67% in the past five years from around GBX 23.75 level to GBX 306.3 (closing price as on December 03, 2019).

It depicts that £10,000 invested in BOO stocks 5-years back, would have become £1,28,968.42 as on December 03, 2010, which reflects that BOO stock turned a money multiplier in the past five years.

Also, shares of BOO traded 142 times higher, 108 times lower and remained unchanged for 3 times against their respective previous closed session, reflects Ups surpassed Down with Up/Down ratio stood at 142/108 or 1.31.

Technical Trends

After it registered a 52-week high of GBX 316.9 as on November 27, 2019, its shares have plummeted approximately 4% to GBX 303.7 (price as on December 04, 2019, before the market close). The moving average convergence divergence is falling; however, it is still above the 9-day exponential moving average (EMA) signal line. The gap between 12-day EMA and 26-day EMA is positive as well.

On today’s (December 04, 2019) trading session at 11:08 AM GMT, before the closing bell, its shares traded approximately 4.5 points or 1.49% lower at GBX 303.18 and registered an intraday high of GBX 309.50 and a low of GBX 302.53.

Also, during the day’s session, its shares went below its short-term support levels of 5-day and 10-day simple moving average prices; however, the stock traded well above its long-term support levels of 100-day and 200-day simple moving average prices.

After witnessing resistance at the upper band of the Bollinger Band® in the November 27, 2019 trading session, its shares fell off from 52-week highs, but were still taking support well above the middle band and traded above the middle of the Bollinger Band®. Also, 14-day and 9-day Relative Strength Index (RSI) of the stock are hovering in the neutral zone.

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