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(Sharecast News) - Boohoo said on Thursday that growth had accelerated in the second quarter as the company's turnaround continues "at pace".
In an update on trading in the six months to the end of August, the company said gross merchandise value (GMV) grew 1.8% year-on-year, with growth of 0.5% in the first quarter accelerating to 2.9% in the second.
Performance was most notable across the Debenhams brand, where GMV rose 14.1% to make up around 41% of group GMV. Pretty Little Thing, Boohoo and Karen Millen have all returned to growth.
Marketplace GMV increased to 38.9% of group GMV, up from 32.7% in the previous year, with the company's brand partner ecosystem expanded to around 30,000 brands or partners.
"The return to growth has been supported by a record marketplace mix, materially improved profitability and significantly improved cash flows," Boohoo said.
Adjusted earnings before interest, tax, depreciation and amortisation rose 13.9% during the period to £24m, while the adjusted EBITDA margin ticked up to 5.9% from 5%. Boohoo, which trades as Debenhams Group, said net debt reduced to £102m from £111m in the same period a year earlier, while cash flows improved significantly, with the cash outflow after capital expenditure and interest materially reduced year on year.
Chief executive Dan Finley said: "Our turnaround continues at pace. This is a strong first half and, importantly, one where growth accelerated as we went through it.
"With the cost programme ahead of plan, lease costs falling, and net debt down year on year, we are reiterating our guidance of double-digit Adjusted EBITDA growth and free cash flow in FY27. Since the half year end, the Sheffield distribution centre and Nasty Gal disposals mark a further significant step in reducing leverage, and we now expect net debt to be negligible at our February 2027 year end."
At 1245 BST, the shares were up 2.7% at 25.16p.
Russ Mould, investment director at AJ Bell, said: "After some decent gains in recent months, the market will be keen to see further evidence it is delivering on the recovery plan.
"Several key brands returned to growth and the core Debenhams brand is also performing robustly despite a backdrop which is about as gloomy as a wet day in late November.
"Critically the company has made real progress with its balance sheet, partly thanks to disposals and as it focuses more heavily on cash generation. This will inspire greater confidence in the group's ability to see its way through what looks set to be a testing period."
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