Analysts at Panmure Liberum have painted a positive picture for Boohoo Group PLC following the publication of its annual results.
The firm was appointed as a joint broker of Boohoo Group PLC – rebranded away from London Stock Exchange notices as Debenhams Group – in March.
Its research analysts Wayne Brown and Anubhav Malhotra were encouraged by Debenhams Group’s turnaround plan and the expected disposal of PLT, maintaining their ‘buy’ recommendation for potential investors.
Panmure Liberum therefore expects the stock to deliver a positive shareholder return of at least 10%, with the firm naming a target price of 35p. As of 1pm today, shares in Boohoo Group PLC are trading at 14.80p.
Last year boohoo – which serves millions of customers across its Debenhams, Karen Millen, boohoo, MAN and PLT brands – published its results for the 12 months to February 29th, 2024, on May 8th – sparking wild speculation as to the reasons for the apparent delay. Analysts had become nervous by the growing uncertainty over the group’s apparent lack of financial visibility.
It had until the end of this month to publish the results and chose to do so yesterday afternoon, days after revealing a £175m refinancing deal which led to a sharp rise in its share price. However the terms of the fast fashion retailer’s deal have raised a few eyebrows – especially as it is a household name.
Yesterday the retail giant reported a 12% drop in revenues for FY25 – from £902.3m to £790.3m – while gross profit fell from £479.3m to £415.8m.
Operating costs for the year ended 28th February 2025 dropped 15% to £375.5m, while adjusted EBITDA climbed 3% to £41.6m. Adjusted loss after tax narrowed by 12% to £43.4m
Boohoo Group plc said its inventory decreased by £135.8m to £72.2m, reflecting its strategy of moving towards a stock-lite, capital-lite operating model – an effective repositioning as an online department store under the Debenhams rebrand.
In a bullish statement, it said this largely reflects the growing importance of the marketplace model where commission income, rather than full transaction value, is recognised.
“Results for the year signal change,” read the report authored by Panmure Liberum analysts Brown and Malhotra. “A new C-suite and strategy has led to significant exceptional costs. This should come as no surprise as tidying up the balance sheet is noisy, but welcome.
“It is rare on the public markets that such decisive actions are taken but there is a plan and the funding to execute this plan (with refinancing recently concluded). The plan is to create a stock light, capital light marketplace across all areas of the group and deliver a sustainable growth model.
“While noise in the financials will continue in FY26, guidance is for EBITDA progress and H1 FY26 has gotten off to a solid start.”
Net debt at year end was £78.2m, down from £95m at the end of FY24.
CEO Dan Finley also revealed yesterday: “As part of our ongoing business review, we are exploring a potential sale of PLT.”
Boohoo bought PrettyLittleThing from Umar Kamani, son of boohoo founder Mahmud Kamani, for £328m in 2020.
“The proposed sale of PLT should further clarify the direction of travel and the significantly reduced net debt shows that cash is the key focus,” continued Panmure Liberum.
“The group has decided that a disposal of PrettyLittleThing (comprising the brand, customer list and inventory) is the best course of action and as such has met the definition of a discontinued operation as it represented a major line of business.
“The group is committed to a disposal – advisors have been engaged and actively seeking a buyer – within 12 months of initial recognition as a discontinued operation.”
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