Underlying sales trends have been improving for the past three quarters and were 5% below last year’s level as of February.
Fixed costs have fallen from £175mn to £119mn, driven by warehouse consolidation and a right-sizing of its inventory levels. Helped by a £40mn equity raise back in February, the group’s net debt levels have fallen to under 2 times underlying cash profit (EBITDA).
Full-year underlying cash profits are now expected to rise by 36% to £53mn, up from its previously upgraded guidance of £50mn.
In the coming year, underlying cash profits are expected to continue growing at double-digit rates and free cash flow is also forecast to “materially improve”.
The shares rose 3.2% in early trading.
Our view
HL view to follow.
Boohoo key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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