Online retailer Boohoo’s (LON: BOO) (BOO.L) share price has declined by around 8% over the past month. In comparison, the FTSE AIM All-Share Index (INDEXFTSE: AXX) has risen by approximately 3%.
In the past month, the company has released several updates. Notably, it released its full year results for the 12 months to 28 February on 5 May. They showed a rise in revenue of 41%, with the firm experiencing UK growth of 39% and international revenue growth of 44%. Its international operations now account for 46% of its total sales, which is a one percentage point increase versus the previous year.
Boohoo’s gross margin increased by 20 basis points to 54.2%. This aided its pre-tax profit, which increased by 35% versus the prior year. Still on financials, the firm reported a net cash position of £276 million, with operating cash flow reaching £201.1 million for the financial year.
The company reported that it has made progress on implementing its Agenda for Change programme. It also announced the appointment of a new non-executive director on the same day as its results were released.
During the year, the firm acquired Debenhams’ online business, as well as Dorothy Perkins, Wallis and Burton. According to its results, they have the potential to add to its diversity and reach, as well as to provide greater online growth opportunities.
Boohoo confirmed other recent updates in its full-year results. For example, it has acquired a new office in London’s West End for £72 million to house its marketing, tech and other staff following M&A and organic-led growth. It expects capital expenditure for the 2022 financial year to be between £125 million and £175 million, which relates to investments in sites in Daventry and Wellingborough in addition to enhancements elsewhere. According to the company, its aggregate warehousing sites will provide it with net sales capacity in excess of £4 billion.
Looking ahead, the retailer forecasts that revenue growth will be 25% in the 2022 financial year. It expects margins for existing brands to be in line with 2021, but anticipates newly-acquired brands to dilute its overall adjusted EBITDA margin by 50-100 basis points.
It noted that trading in the new financial year has been strong, but remains cautious about the economic outlook. It expects the benefits from lower returns over the past 12 months to begin to unwind this year, while it forecasts that carriage and freight costs will remain elevated.
The Boohoo share price has fallen 9% in the past year, while it is up 530% in the past five years. The FTSE AIM All-Share index is up 54% and 73% over the same time periods. The company’s shares currently trade at 317p at the time of writing.
In the past month, there have been a couple of director deals in Boohoo’s shares. CEO John Lyttle sold almost 170,000 shares to cover tax liabilities regarding the vesting of a share award. Meanwhile, non-executive director Tim Morris bought over 15,000 shares in the firm at a price of just over 318p.
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Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.