Business
Response to share price
Response to share price.
About this update from Boohoo Group Plc
[{"type":"text","content":"\n \n \n RNS Number : 0568O\n boohoo group plc\n 27 May 2020\n \n \n \n \n \n \n For Immediate Release\n \n \n 27 May 2020\n \n \n \n \n boohoo group plc\n \n \n (\"boohoo\" or \"the Group\")\n \n \n Response to share price \n \n \n \n boohoo (AIM: BOO), a leading online fashion group, notes the recent decline in its share price which the Group understands is in response to a short-selling note issued on 26th May that contains allegations of disclosing information that could be deemed to be misleading.\n \n The Group strongly refutes the allegations made in the research note, and would highlight the following to investors:\n \n \n Definition of Free cash flow\n \n \n Free cash flow is disclosed within page 9 of the Group's most recent annual results published on 22 April 2020, and contains clear definitions, alongside a full reconciliation down to net cash flow for the financial year, including items such as tax paid and dividends paid to minority shareholders. \n \n \n International accounting standards require the Group to fully consolidate its cash flows, and its treatment of this with respect to its subsidiary, PrettyLittleThing (\"PLT\") reflects this conformance with accounting standards.\n \n \n PLT profitability\n \n \n The Group strongly refutes any allegations of understating costs incurred by PLT, thereby overstating its profitability. All inter-company transactions are conducted on an arms' length basis. The Group operates a multi-brand strategy with the profitability of its more established brands such as boohoo and PLT being significantly ahead of the Group's adjusted EBITDA margin of 10.2%; with that higher margin being reinvested into new opportunities and brands that the Group has started or acquired in recent years such as boohooMAN, Nasty Gal, MissPap, Karen Millen and Coast.\n \n \n PLT option\n \n \n As disclosed at the time of the acquisition of the majority of PLT, and in the latest annual report and accounts, the Group has the option to acquire the remaining 34% minority shareholding in PLT, with the terms of the option coming into being on 28 February 2022. Under the terms of the agreement, it was agreed that an independent big-four accountancy firm would undertake a valuation exercise to determine the market value for PLT, after which a minority discount may be applied of up to 30%.\n \...