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Boohoo to beat full year sales guidance

Boohoo has revealed that it expects to outperform its predicted revenue growth for the full year following “strong trading” in the first two months of 2017, and has completed its acquisition of US etailer Nasty Gal. 

It expects group revenue to grow by 50% in the year to 28 February, ahead of the previously guided 46% to 48%. It added that EBITDA margin will be at the top end of the range of 11% to 12% after its operating leverage [which measures a company’s fixed costs as a percentage of its total costs] improved.

Boohoo’s full year results will be announced on 26 April. 

The Manchester-based business also confirmed that its acquisition of the intellectual property rights and customer databases of Nasty Gal for $20m (£16m) has completed.

The transaction will be financed through a combination of the group’s existing cash resources and a new bank debt facility of £12m. The group will consolidate Nasty Gal on 1 March.

Nasty Gal, which was founded in 2006 and is based in Los Angeles, delivered net revenue of $77.1m (£62.7m) in the year to 1 February 2016. This included revenue from vintage clothing and third-party brands, which are excluded from the sale to Boohoo.

The company made a net loss after tax of $21m (£17m) after operating costs.

 

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