Boohoo back in profit as turnaround gathers pace, net debt heads toward zero

what happened

Boohoo, whose shares trade on AIM, reported a pre-tax profit of £28.3m. A year earlier it had posted a loss, and the statutory result improved by £46m compared with the first half of the prior financial year. According to TradingView, citing Sharecast, adjusted EBITDA climbed 14.6% to £24m, with the margin reaching 5.9%.

Debenhams grew gross merchandise value by 14% and now makes up roughly 42% of group GMV. Pretty Little Thing, Boohoo and Karen Millen all returned to growth. The marketplace share reached a new high of 38.9%, which pushed the gross margin up by 220 basis points to 54.1%. Free cash flow turned into a £5.6m inflow, capital spending dropped to £5.5m and net debt fell to £98.5m.

The company said trading in September stayed strong and confirmed its full-year outlook for GMV growth and adjusted EBITDA of at least £59m. Disposals after the period, including the Sheffield automation business and the exit from Nasty Gal, should bring net debt to what it called negligible levels by year-end. Chief executive Dan Finley said the turnaround was continuing at pace and that the group had returned to GMV growth.

why it matters

The shift matters for the market because Boohoo recorded its first positive pre-tax profit since August 2021. Further cost cuts are expected in FY28, including lower depreciation, lease and interest costs, which could support margins. As of 10:45 BST the shares were up 3.73% at 25.93p.

market impact

Retail stocks and Boohoo on AIM: higher profit and lower debt support investor sentiment toward the name.

tags

instruments