BOO plans to triple UK capacity with new warehouse, Founder's family sells £80m of stake
Companies: boohoo group Plc
Shares in AIM-listed fast fashion Group Boohoo.com jumped 8% early on Thursday following news that it has completed a £50m placing to expand the capacity of its warehouses.
The Group said it had placed 22.7m new shares via an accelerated book building conducted by Zeus Capital and Jefferies at 220p, raising £50m. BOO says it will enable it to build a greater capacity warehouse to facilitate up to £3bn worth of sales, significantly higher than the current £1bn capacity.
Alongside the raise, Co-Founder Mahmud Kamani and some of his relatives sold 36.6m shares for just over £80m, leaving the Kamani and Kane stake at just under 40%.
Justifying the expansion, the company said its growth rate had accelerated the need for more capacity, leading to plans to build an automated "super-site" of 600k square feet to provide £bn of sales capacity:
"The land acquisition of the new site, together with the construction, will cost around £150 million over three years to FY20. As a result, the Group expects capital expenditure now to be £63 million this year (previous guidance was £34 million). Capital expenditure linked directly to the super-site is likely to be around £75 million in FY19 and around £49 million in FY20."
The news accompanied a trading update that showed solid overall revenue growth ahead of expectations, up 106% to £120m thanks to massive growth at PrettyLittleThing.
Boohoo reported revenues of £86m, up c.50% YoY, with growth in the UK, Europe, and the US all strong, while PLT reported revenues of £30m, up 305% YoY, from 1.6m active customers.
Mahmud Kamani and Carol Kane, Co-Founders and Joint CEOs said the performance was encouraging across all brands and regions, with Boohoo and PLT delivering "exceptionally" high growth.
