Boohoo Group’s pre-tax profit climbs by 35% in fiscal 2021

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on May 5, 2021
  • Boohoo Group reports £124.7 million of pre-tax profit in fiscal 2021.
  • The British online fashion retailer's revenue jumps to £1.75 billion.
  • The board refrains from declaring a dividend to shore up finances.

Boohoo Group plc (LON: BOO) said on Wednesday its pre-tax profit saw a significant increase in fiscal 2021. The company also expressed confidence that its revenue is likely to climb by 25% this year. Boohoo said:

“The group’s medium-term target of sales growth of 25% per year and an adjusted EBITDA margin of around 10% remains unchanged.”

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According to Boohoo, robust performance from its latest acquisitions, including Debenhams, helped boost results in the recently concluded year. Boohoo shares tanked roughly 4% in premarket trading on Wednesday but recovered most of its intraday loss on market open.

Boohoo reports £1.75 billion of revenue

Boohoo reported £124.7 million of pre-tax profit in the financial year that concluded on 28th February. In 2020, its profit before tax was capped at a lower £92.2 million. On an adjusted basis, the online fashion retailer noted £173.6 million of earnings before interest, taxes, depreciation and amortisation (EBITDA) versus the year-ago figure of £126.6 million.

The Manchester-based company generated £1.75 billion of revenue in fiscal 2021. In the previous year, its revenue was stood at a lower £1.23 billion. The board refrained from declaring a dividend on Wednesday to shore up finances for suitable business acquisitions, and consequently, rapid growth.

In separate news from the United Kingdom, media company ITV plc said it expects revenue from advertising to rebound significantly in the second quarter.

Liberum analysts rate Boohoo Group at ‘hold’

Liberum analysts commented on Boohoo’s financial update on Wednesday and said:

“While the continued strong financial performance suggests a ‘buy’ rating, we remain cautious given the scale of the ESG challenges facing the group, the possibility of follow-up investigations and potential financial impact from an ethical supply chain though the company guidance dismisses this. We, therefore, rate the boohoo group ‘hold’. If Boohoo can adequately deal with its ESG issues, there remains a significant upside to the share price. Greater clarity on ESG issues and that there will not be any future financial impact from implementing an ethical sourcing and supply chain model or penalties for past breaches; is required for us to return to ‘buy’.”

Boohoo Group performed fairly upbeat in the stock market last year with an annual gain of a little under 15%. At the time of writing, the London-listed firm is valued at £4.08 billion and has a price to earnings ratio of 47.06.

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