Last checked at 17 Nov 2008 07:00
FOR RELEASE AT 7.00 AM
17 November 2008
ASOS PLC
("ASOS" or "the Company")
(Leading online fashion retailer)
Interim Results for the 6 months to 30 September 2008
Financial Highlights:
Sales +107% year on year to £65.7 million
Gross margin + 80bps year on year to 46%
Profit before tax +68% year on year to £4.1 million
Cash in bank £8.9m
Sales for the 7 weeks to 16 November 2008 +104% year on year
Business Highlights:
Total number of product lines up 238% year on year to 19,400 as at 31 October 2008
Number of brands up 135% year on year to 700 as at 31 October 2008
Number of active customers up 95% year on year to 947,000 as at 31 October 2008
Total number of unique visitors in October 2008 up 93% to 4.5 million
Successful launch of ASOSRed
Successful launch of Maternity
International sales up 252% year on year to £11.4m
For further information:
ASOS plc Tel: 020 7756 1000
Nick Robertson, Chief Executive
Jon Kamaluddin, Finance Director
Cubitt Consulting Tel: 020 7367 5100
Brian Coleman Smith / James Verstringhe / Nicola Krafft
JPMorgan Cazenove Tel: 020 7588 2828
Luke Bordewich / Gina Gibson
Singer Capital Markets Tel: 020 3205 7500
Nicholas How / Brad Cheng
Background Note
ASOS is rapidly becoming the market leader in the UK online fashion world. The business continues to generate profitable growth despite continued investment in operational resources and enjoys strong and increasing barriers to entry.
Established in June 2000 and admitted to AIM in October 2001, ASOS.com is the UK's largest independent online fashion and beauty retailer and offers over 19,400 branded and own label product lines across womenswear, menswear, footwear, accessories, jewellery and beauty with approximately 1,150 new product lines being introduced each week.
Aimed primarily at fashion forward 16-34 year olds, ASOS.com attracts over 4.5 million unique visitors a month and as at 31 October 2008 had 1.88 million registered users and 0.95 million active customers (defined as having shopped in the last 6 months).
www.asos.com
ASOS PLC
("ASOS" or "the Company")
(Leading online fashion retailer)
Interim Results for the 6 months to 30 September 2008
CHIEF EXECUTIVE'S STATEMENT
ASOS has once again performed strongly and sales for the 6 months to 30 September 2008 are up 107% whilst profit before tax for the same period is up 68% to £4.1 million.
Despite adverse economic conditions, we have, with our strong balance sheet and operational cash flows, continued to invest in a number of customer focussed and strategic initiatives to support future growth.
We are convinced that international expansion is a huge growth opportunity for ASOS. To this end we will be appointing Jon Kamaluddin, currently Finance Director, to the role of International Director. Jon will continue in his existing role until a suitable replacement is found. We also intend to strengthen our Board with the appointment of two additional Non Executive Directors in due course.
CURRENT TRADING AND OUTLOOK
So far ASOS is proving resilient to the slowdown in consumer spending and sales for the 7 weeks to 16 November 2008 are 104% ahead year on year. Nevertheless, as stated at the time of the AGM, we face tougher second half comparables and need to trade through the all important Christmas period. The Board is pleased with the progress that ASOS has made to date with the Company continuing to trade in line with the Board's expectations. We view the coming months with cautious optimism.
Further guidance will be provided at the time of the Christmas trading statement.
FINANCIAL REVIEW
| £ '000s | H1 08/09 | H1 07/08 | Increase |
| Revenues | 65,706 | 31,806 | 107% |
| Gross profit | 30,233 | 14,370 | 110% |
| Gross margin | 46.0% | 45.2% | |
| Operating profit | 3,836 | 2,273 | 69% |
| Profit before tax | 4,052 | 2,418 | 68% |
| EPS - fully diluted (pence) | 3.7p | 2.2p | 68% |
Revenues
Total revenues were up by 107%, this is analysed as follows:
| £ '000s | H1 08/09 | H1 07/08 | Increase |
| Retail sales | 58,932 | 27,965 | 111% |
| Delivery receipts | 6,271 | 3,292 | 90% |
| Third party revenues | 503 | 549 | -8% |
| Group revenues | 65,706 | 31,806 | 107% |
Operating Profit
Operating profit increased 69% to £3.8 million, driven by strong sales growth and a gross margin increase of 80 basis points to 46%. This was partly offset by a 118% rise in operating costs to £26.4 million, reflecting the first half bias of investment this financial year.
Cash Flow and Balance Sheet
The Group continues to be cash generative and all investment is funded from cash flow. During the first half, capital expenditure amounted to £3.7 million. The cash balance on 30 September 2008 amounted to £8.9 million and the Group had no debt. For the year ending 31 March 2009 capital expenditure is likely to total around £8.6 million.
Surplus funds are invested in short-term deposits at a major high-street bank with the objective of maximising fixed interest returns whilst providing the flexibility to fund ongoing operations. It is not the Group's policy to engage in speculative activity or to use complex financial instruments.
BUSINESS REVIEW
ASOS continues to focus on improving the three key areas of Choice, Presentation and Service whilst at the same time ensuring that growth is well managed.
Product Choice
Product choice is at the core of the ASOS proposition. At the end of October 2008, 19,400 different product lines were available on the site, up four-fold from 5,700 in October 2007.
There was a significant increase in the number of brands available on the site, with the number more than doubling to around 700 by the end of October 2008. New brands to ASOS over the last 6 months include Karen Millen, Warehouse, Whistles and Kookai. The overall mix of own label to branded product sales during the first half 2008/09 was 52% to 48%.
ASOSRed, ASOS' discount designer brand store, was launched on 5 September 2008. Early signs have been very encouraging and sales and margin have been ahead of plan.
We now introduce approximately 1,150 new product lines onto the website each week.
In the coming 6 months we will:
continue to broaden the number of product lines offered;
bring further brands onto the site;
launch ASOSKids; and
launch a premium designer brands shop in shop.
Product Presentation
The ASOS website was redesigned in September 2008 and we have plans for another redesign during the second half of the financial year.
The award winning ASOS magazine now has the third highest circulation of any monthly fashion magazine in the UK, after Glamour and Cosmopolitan. In the first half of the year we launched the first ASOS men's magazine. We also underpinned our fashion credentials through extensive product placement in key consumer publications.
Customer Service
In the six months to 30 September 2008, we shipped 1.7 million orders, an 82% increase on the same period last year.
In August, the standard delivery promise was decreased from within 3-4 days to within 2-3 days. A Saturday delivery option was added to the Next Day service as well as the possibility to order over the weekend for a Monday delivery.
Excellent customer care is integral to our strategy and to this end the customer care centre is now manned 24 hours a day, seven days a week.
Unaudited Consolidated (Condensed) Income Statement for the six months ended 30 September 2008
| Audited | |||
| 6 months to | 6 months to | 12 months to | |
| 30 September | 30 September | 31 March | |
| 2008 | 2007 | 2008 | |
|
| £'000 | £'000 | £'000 |
| Revenue | 65,706 | 31,806 | 81,044 |
| Cost of sales | (35,473) | (17,436) | (43,760) |
|
|
|
|
|
| Gross profit | 30,233 | 14,370 | 37,284 |
| Administration expenses | (26,397) | (12,097) | (30,322) |
|
|
|
|
|
| Operating profit | 3,836 | 2,273 | 6,962 |
| Finance income | 216 | 145 | 349 |
|
|
|
|
|
| Profit before tax | 4,052 | 2,418 | 7,311 |
| Taxation | (1,150) | (745) | (2,258) |
|
|
|
|
|
| Profit for the period | 2,902 | 1,673 | 5,053 |
| Earnings per Share | |||
| Basic | 4.0p | 2.3p | 6.9p |
| Diluted | 3.7p | 2.2p | 6.6p |
Unaudited Consolidated Statement of Changes in Equity for the six months ended 30 September 2008
| Share capital | Share premium | Retained earnings | Treasury shares | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance as at 1 April 2008 | 2,564 | 3,356 | 10,967 | (943) | 15,944 |
| Shares alloted in the year | 17 | 180 | - | - | 197 |
| Purchases of shares by EBT | - | - | - | (1,477) | (1,477) |
| Share options charge | - | - | 149 | - | 149 |
| Profit for the period | - | - | 2,902 | - | 2,902 |
| Balance as at 30 September 2008 | 2,581 | 3,536 | 14,018 | (2,420) | 17,715 |
Unaudited Consolidated (Condensed) Balance Sheet as at 30 September 2008
|
| Audited | ||
| 30 September | 30 September | 31 March | |
| 2008 | 2007 | 2008 | |
|
| £'000 | £'000 | £'000 |
| Goodwill | 1,060 | 1,060 | 1,060 |
| Property, plant and equipment | 8,398 | 2,974 | 5,590 |
| Deferred tax asset | 2,550 | 560 | 2,876 |
| Non current assets | 12,008 | 4,594 | 9,526 |
| Inventories | 22,126 | 8,231 | 11,694 |
| Trade and other receivables | 5,395 | 2,791 | 4,778 |
| Cash and cash equivalents | 8,852 | 5,857 | 10,369 |
| Current assets | 36,373 | 16,879 | 26,841 |
| Current liabilities | (29,192) | (11,082) | (18,648) |
| Current tax liabilities | (838) | (752) | (1,095) |
| Current liabilities | (30,030) | (11,834) | (19,743) |
| Net current assets | 6,343 | 5,045 | 7,098 |
| Provisions for other liabilities and charges | (636) | - | (680) |
|
|
|
|
|
| Net assets | 17,715 | 9,639 | 15,944 |
| Called up share capital | 2,581 | 2,548 | 2,564 |
| Share premium | 3,536 | 3,185 | 3,356 |
| Treasury shares | (2,420) | (943) | (943) |
| Retained earnings | 14,018 | 4,849 | 10,967 |
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|
|
|
|
| Total equity | 17,715 | 9,639 | 15,944 |
Unaudited Consolidated (Condensed) Cash Flow Statement for the six months ended 30 September 2008
| Audited | |||
| 6 months to | 6 months to | 12 months to | |
| 30 September | 30 September | 31 March | |
|
| 2008 | 2007 | 2008 |
| Cash generated from operations | 4,324 | 2,344 | 11,651 |
| Taxation paid | (1,081) | - | (1,811) |
| Net cash inflow from returns on investment and servicing of finance | 216 | 145 | 349 |
| Net cash outflow from investing activities | (3,696) | (1,301) | (4,740) |
| Net cash outflow from financing activities | (1,280) | (647) | (459) |
| Net decrease in cash from discontinued operations | - | (63) | - |
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|
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| Net (decrease)/increase in cash and cash equivalents | (1,517) | 478 | 4,990 |
| Notes to the Financial Statements | ||||||
| 1. The interim accounts for the six months ended 30 September 2008 are unaudited and do not constitute statutory accounts in accordance with section 240 of the Companies Act 1985. The financial information for the six months ended 30 September 2007 has been extracted from the IFRS compliant financial statements for the twelve months to 31 March 2008, the auditors gave an unqualified report on these results. A copy of those financial statements has been filed with the registrar of companies. | ||||||
| 2. Segmental analysis | ||||||
| 6 months to | 6 months to | 12 months to | ||||
| 30 September | 30 September | 31 March | ||||
| 2008 | 2007 | 2008 | ||||
| £'000 | £'000 | £'000 | ||||
| Revenue | ||||||
| Geographical analysis of revenue by origin | ||||||
| UK | 54,356 | 28,585 | 73,044 | |||
| North America | 859 | 288 | 659 | |||
| Rest of the world | 10,491 | 2,933 | 7,341 | |||
| 65,706 | 31,806 | 81,044 | ||||
| Revenue consists primarily of internet and advertising sales as well as postage and packaging receipts. Revenue is recorded net of returns, relevant vouchers and value added tax when the significant risks and rewards of ownership have been transferred to the buyer. | ||||||
| 3. Earnings per share | ||||||
| The calculation of earnings per share is based on the following: | ||||||
| 6 months to 30 September 2008 | 6 months to 30 September 2007 | 12 months to 31 March 2008 | ||||
| £'000 | £'000 | £'000 | ||||
| Profit attributable to shareholders | 2,902 | 1,673 | 5,053 | |||
| Weighted average number of shares | ||||||
| For basic earnings per share | 73,434,444 | 72,801,013 | 72,865,070 | |||
| For diluted earnings per share | 78,639,912 | 76,213,048 | 77,140,316 | |||
| 4. The interim report will be posted to all shareholders of the Company and copies will be available upon application to ASOS Plc, Greater London House, Hampstead Road, London, NW1 7FB. | ||||||