Boohoo swings back to profit as turnaround accelerates, net debt nears zero

23rd Oct 2026 07:15

(Sharecast News) - Debenhams parent company Boohoo Group said on Friday that its turnaround continued to gather momentum in the first half, with a sharp swing back to profit and a further reduction in net debt.

Boohoo said reported underlying earnings had jumped to £19.7m from a £3.5m loss a year earlier, helped by an 82% drop in exceptional costs, while statutory pre-tax profits came in at £28.3m, a £46m improvement on H1 FY26. Adjusted EBITDA rose 14.6% to £24m, with margins improving to 5.9%.

Debenhams delivered 14% gross merchandise value growth and now accounts for around 42% of group GMV, while Pretty Little Thing, Boohoo and Karen Millen all returned to growth. Marketplace penetration hit a record 38.9%, lifting gross margins by 220 basis points to 54.1%. Free cash flow swung to a £5.6m inflow, capex fell to £5.5m, and net debt reduced to £98.5m.

Boohoo said September trading remained strong and reiterated guidance for full‑year GMV growth and adjusted EBITDA of at least £59m, alongside a positive pre-tax profit performance, improved reported EBITDA and negligible net debt.

The AIM-listed group also noted that post‑period disposals - including the Sheffield automation sale and the divestment of Nasty Gal - will take net debt to "negligible levels" by year‑end.

Looking ahead, Boohoo expects further material cost reductions in FY28, including lower depreciation, lease costs and interest charges. Boohoo said it sees a medium‑term opportunity for Debenhams to become a multi‑billion‑GMV business generating more than £100min pre-tax profits and "significant" cash flow.

Chief executive Dan Finley said: "The turnaround continues at pace. The group has returned to GMV growth, gross margins are expanding and returns rates lowering. Reported EBITDA has increased over 600% and profit before tax has improved to £28.3m. This is the first time the group has delivered positive profit before tax since August 2021.

"I am pleased to report that net debt is expected to be negligible at year-end. This is significantly ahead of our original guidance provided at the start of the year. I see material opportunities ahead and we are fully focused on maximising them."

As of 1045 BST, Boohoo shares were up 3.73% at 25.93p.

Reporting by Iain Gilbert at Sharecast.com

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