Strong demand lifts Boohoo’s first-half profit


Boohoo founder Mahmud Kaman. 
"The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply." says the company. (Photo: Jerritt Clark/Getty Images).
Boohoo founder Mahmud Kaman. "The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply." says the company. (Photo: Jerritt Clark/Getty Images).

BRITISH online fashion business Boohoo has recorded a steep rise in its first-half pre-tax profit on Wednesday (25).

The fashion firm said pre-tax profit rose 83 per cent to £45.2 million for the six months ended August 31 compared to the same period last year.

A strong financial performance amid gloomy market conditions was ascribed to the strong demand for the company’s brands – PrettyLittleThing and Nasty Gal.

The revenue of the Manchester-based business rose 43 per cent to £564.9m, as its brand PrettyLittleThing grew in France and the US while Nasty Gal’s revenue more than doubled after its stunning performance in the US.

PrettyLittleThing’s revenue rose 41 per cent to £237.6m, with the US and French markets performing particularly well.

Revenue under the Nasty Gal brand rose 148 per cent to £43.9m with significant growth in the US and the UK.

Boohoo reported a capital spending of £6.4m in the first half, with further 19.4m spending on the acquisition of new brands.

The latest figures have beaten the market analysts expectations.

Celebrity campaigns have also boosted the performance of Mahmud Kamani’s business.

A social-media friendly company, Boohoo has teamed with television celebrities and models.

Its revenue growth was spread across all the group’s brands, showing particular strength in the US and European markets.

The company’s active customers rose 30 per cent to 13m. Further, the key order metrics such as frequency, conversion, order value and others were seen to be improving.

John Lyttle, Boohoo Chief Executive Officer, said: “It has been a fantastic first half of the year for the group. We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded £1 billion in the last 12 months.

“We have delivered strong growth and operating leverage in our more established brands and will continue to invest in both our more established and newly-acquired brands.

“We enter the second half of the year well-placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well-invested infrastructure, will deliver further market share gains.”

As announced earlier this month, the group revenue growth for the year up to February 2020 is expected to be around 33 per cent to 38 per cent, with adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin for the financial year to remain at 10 per cent, reflecting anticipated investments in the financial year into the three brands acquired by the group in the first half-year.