RNS Number:6019F
ASOS PLC
04 July 2006
FOR RELEASE
7.00 am
Tuesday 4 July 2006
ASOS plc
"ASOS" or "Group"
("A leading Internet based fashion retailer")
RECORD RESULTS
RESULTS
*Group sales +39% to #18.80m
*Group profit before tax and amortisation of goodwill + 49% to #1.65m
*Group profit before tax + 61% to #1.42m
*Remaining insurance proceeds of #0.60m expected in the six months to 30
September 2006
*Cash at bank +82% to #3.74m
*Fully diluted EPS before tax and goodwill amortisation +47% to 2.2p
*ASOS.com registered users +60% to 960,000 (as at 2 July 2006)
*Sales for the 13 weeks to 2 July 2006 are 65% ahead of last year
HIGHLIGHTS
*Continued strong growth
*Investment in the future - people, systems and logistics
*Resilience of business - recovery from Buncefield
*Confident of another strong year
ASOS plc
Nick Robertson, Chief Executive Tel: 020 7240 7070
Jon Kamaluddin, Finance Director Tel: 020 7240 7070
www.asos.com
Cubitt Consulting
Brian Coleman-Smith / Nia Thomas Tel: 020 7367 5100
Seymour Pierce
Mark Percy / Nicola Marrin Tel: 020 7107 8000
ASOS plc is an Internet Retail and Marketing Services Group, established in June
2000 and admitted to AIM in October 2001. Its principal business is ASOS.com, a
leading online fashion and beauty retailer. Aimed primarily at an Internet savvy
18-34 year old, ASOS has over 960,000 registered customers at 2 July 2006, and
offers over 4,000 lines across womenswear, menswear, jewellery, beauty,
accessories and footwear.
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
SUMMARY
The Group reports a 39% increase in sales to #18.80m for the year to March 2006
and a 49% increase in profit before tax and amortisation of goodwill to #1.65m.
At the year end there was #3.74m in cash at bank, up from #2.06m the previous
year to March 2005.
A strong performance considering our only warehouse was damaged by the
Buncefield Fuel Depot explosion on 11 December 2005. As a result, the website
was closed for transactions for five and a half weeks and 19,000 undeliverable
orders were refunded. Trading in the fourth quarter was disrupted as we
re-established the stock position to the correct mix and level.
Had we not been affected by Buncefield, we believe Group sales would have been
in the region of #25m, delivering a profit before tax of approximately #2.20m.
Due to phasing of the insurance proceeds, we are expecting to receive an
additional #0.60m due during the 6 months to 30 September 2006. The business has
now fully recovered.
On behalf of the board, I would like to pass on our sincere thanks to our
colleagues whose spirit and determination got us back on our feet so quickly. I
would also like to extend our very best wishes to the 106 colleagues in Hemel
Hempstead who are now employed by Unipart Logistics Limited.
We now have 960,000 registered users (as at 2 July 2006) and are firmly
positioned behind Next as the second most visited online fashion retailer in the
UK.
In April 2006 we welcomed Rob Bready to the board as retail director and Peter
Williams as a non-executive director.
The New Year has started strongly with sales for ASOS.com 65% above last year
for the 13 weeks to 2 July 2006. With nine months trading and the important
Christmas period still to come, this performance should not necessarily be taken
as an indication of the results for the full year. The business continues to
evolve and it is essential that we continue to invest in our infrastructure to
support our growth forecasts.
RESULTS
*Group sales +39% to #18.80m
*Group profit before tax and amortisation of goodwill + 49% to #1.65m
*Group profit before tax + 61% to #1.42m
*Remaining insurance proceeds of #0.60m expected in the six months to 30
September 2006
*Cash at bank +82% to #3.74m
*Fully diluted EPS before tax and goodwill amortization +47% to 2.2p
*ASOS.com registered users +60% to 960,000 (as at 2 July 2006)
*Sales for the 13 weeks to 2 July 2006 are 65% ahead of last year
HIGHLIGHTS
*Continued strong growth
*Investment in the future - people, systems and logistics
*Resilience of business - recovery from Buncefield
*Confident of another strong year
Lord W Alli
Chairman
4 July 2006
CHIEF EXECUTIVES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
The online marketplace
The growth in online shopping shows no sign of slowing. For 2006, the IMRG
(Interactive Media in Retail Group) are forecasting a 36% year on year increase
in online spend to #26.1 billion. The number of online shoppers is set to grow
by 8% to 26 million, and they will spend an average of #1,003, up from #816 in
2005. Key to e-commerce is the number of broadband connections and this is
expected to rise by 37% to 13.4 million. Customers, as they always do, are
voting with their feet.
Product offer
The buying and merchandising team has doubled in size to support the increase in
product lines from 2,000 to 4,000. Further appointments are planned to enable us
to compete with the very best of the high street. In addition we will be
supporting the buying team with an in-house design department over the coming
months. As the profile of ASOS has risen, we have been able to attract major new
brands including Diesel, Firetrap and Replay. We believe the investment in
broadening our product range will support our growth ambitions for 2006/7 and
beyond.
The Website
The website is continually evolving as the product range expands and new
technologies emerge. In April 2006 we launched ASOS Catwalk - a function whereby
fashion lines are presented in moving images on a catwalk as well as the
traditional still images. We are currently the only fashion retailer in the UK
to do this. A number of new initiatives are planned for the coming months to
further enhance the shopping experience.
Marketing
We have over 960,000 registered users as at 2 July 2006 all of whom receive two
emails a week featuring the latest products, trends and style tips. The rate at
which we gather new e-mail addresses is expected to increase following a new
contract, signed in April 2006, with an email acquiring company. Of all our
marketing activity the email remains the single biggest generator of sales.
Our investment in magazine advertising has increased which has in part been
funded by our deliberate reduction in affiliate marketing activities. In our
view this is necessary if we are to establish ASOS as the UK's leading online
fashion business.
Key Performance Indicators
05/06 04/05
ASOS.com margin (excluding Third Party Revenues) 43.8% 44.9%
Returns % to sales 21.4% 20.5%
Basket Value (inc VAT) #39.32 #36.56
Average units per basket 2.4 2.1
Average Selling Price per unit (inc VAT) #16.54 #17.02
% ASOS.com Sales from North America 1.6% 1.3%
% ASOS.com Sales from Rest of World 7.2% 5.4%
Third party revenues
For the year to March 2006 we generated #0.37m (2004/5: #0.23m) in third party
revenues. This is made up of banner advertising, list sales and sampling. We now
have specific resource in this area and expect revenues to increase by 70% for
the year to March 2007.
Logistics
In early 2006 we made the decision to outsource our logistics function to a
third party to ensure our capabilities keep pace with the requirements of the
business and to allow us to focus on our core competencies. From 1 May 2006,
Unipart Logistics Limited took over the running of our distribution centre in
Hemel Hempstead.
Entertainment Marketing
Our Marketing business fared less well during the year with sales dropping from
#0.74m to #0.60m. An internal re-structure and a re-focusing of the business
should result in a return to profit in the coming year.
Current trading and prospects
The prize for dominating online fashion in the UK is high so we must continue to
invest in resource, infrastructure and marketing if we are to sustain the
current growth levels and realise the full potential of ASOS. The high street is
starting to invest in their online offer, so we must ensure we have better
capabilities at every level to compete.
Early signs are that 2006/7 should be another strong year of growth with sales
for the 13 weeks to 2 July 2006 running 65% ahead of last year.
Nick Robertson
Chief Executive
4 July 2006
FINANCE DIRECTOR'S REVIEW
FOR THE YEAR ENDED 31 MARCH 2006
Sales
The breakdown of Group sales is shown below.
#'000s 2006/7 2005/6 Increase %
Clothing and Accessories 17,841 12,545 42%
Third Party Revenues 366 229 60%
Entertainment Marketing 601 744 (19%)
Group Sales 18,808 13,518 39%
Margin
ASOS.com delivered a gross margin before third party revenues of 43.8% (2004/5:
44.9%). This was behind our expectations for the year and resulted from the
increase in markdown required to clear stock left unsold after the Christmas
period when the website was closed following Buncefield.
We anticipate that gross margin before third party revenues will improve
slightly during 2006/7.
Operating costs
Operating costs, including depreciation but before the one-off effects of the
Buncefield Fuel Depot explosion and the costs associated with the warehouse move
in August 2005, have increased in the year by #3.76m to #9.37m. The most
significant rises in operating costs in 2005/6 have been in Head Office costs
which have risen by #1.31m year on year to #3.17m and warehousing costs which
have risen by #2.13m year on year to #3.40m.
We have increased our head office team over the year from 47 to 68 people. This
has grown further since the year end to 90 people. All disciplines have been
strengthened and in particular we have grown our teams in Buying, Merchandising,
IT and Image Management. Further rises are budgeted in 2006/07 as the full year
impact of the new starters in 2005/6 flows through and as we continue to ensure
that the business has the infrastructure to support its growth.
The growth in staff numbers will necessitate an office move during 2006/7. We
anticipate doubling our space in London during 2006/7.
The impact of the above and the increase in headcount means that Head Office
costs will be in the region of #5.70m in 2006/7.
Our move to a new warehouse in Hemel Hempstead in August 2005 meant a
significant increase in rent and other occupancy costs and the number of
warehouse staff increased in the year in order to cope with the growth in
volumes. Warehouse costs vary with volume and indicatively these would range
from #4.60m on sales of #30m rising to #5.80m on sales of #40m in 2006/7.
We anticipate that other operating costs will be in the region of #4.00m in
2006/7.
Buncefield Fuel Depot Explosion
The credit of #2.44m shown in the profit and loss account represents the sum of
the agreed insurance proceeds received and receivable as at 31 March 2006 in
respect of stock losses, increased costs of working, damage to our plant and
equipment and lost gross profit, less the costs incurred as a result of the
incident. We anticipate a further final amount of #0.60m to be received in 2006/
7.
Taxation
The group has recognised a deferred tax asset of #0.20m (2004/5: #0.27m) as the
directors believe that this amount is likely to be recovered in the foreseeable
future. This asset arises from the availability of trading losses and will be
recovered when sufficient trading profits have been generated to utilise the
trading losses.
The group has tax losses of #1.24m (2004/5: #2.75m) which are available to
offset against future taxable profits.
Cash and Balance Sheet
The group continues to be cash generative and there was a net cash inflow over
the period of #1.68m. The group has sufficient cash reserves to meet our working
capital requirements and capital expenditure plans for the budgeted growth in
2006/07. We are confident that the group will continue to generate cash from
operating activities. Surplus funds are on time deposit with an AAA rated bank.
During the period share options under the group's EMI approved Share Option
Scheme were exercised raising #16,000.
Net current assets increased to #2.97m (31 March 2005: #2.04m).
Capital Expenditure
A total of #0.90m has been invested in the year to March 2006 of which #0.65m
was spent fitting out the new warehouse in Hemel Hempstead and #0.25m was spent
developing our IT systems.
For 2006/7 total investment of #1.60m will be required in IT systems, warehouse
fixtures and fittings and on the fit out of new London office space.
Dividends
The directors do not propose a dividend, however, we will continue to keep the
dividend policy under review.
Accounting Policies
The introduction of FRS 21 has required a prior year adjustment relating to an
intercompany dividend from ASOS.com Ltd to ASOS plc. The effect of this on the
preceding period (2004/5) has been to increase retained earnings by #300,000 in
ASOS.com Ltd and decrease the retained earnings in the company accounts of ASOS
plc by the same amount.
Implementation of International Accounting Standards is mandatory for AIM listed
companies for results reported for years commencing on or after 1 January 2007.
We will consider whether early adoption is appropriate once the full
implications of introduction have been assessed.
Jon Kamaluddin
Finance Director
4 July 2006
ASOS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2006
Year ended Year
31 March ended
2006 31 March
2005
# #
TURNOVER 18,807,980 13,517,676
Cost of sales (10,028,398) (6,927,613)
----------- -----------
GROSS PROFIT 8,779,582 6,590,063
Admin expenses (9,634,780) (5,522,150)
Amortisation of goodwill (228,334) (228,334)
Exceptional Item - Business Disruption 2,439,078 -
----------- -----------
OPERATING PROFIT 1,355,546 839,579
Interest receivable/payable 61,348 38,653
----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 1,416,894 878,232
Tax on profit on ordinary activities (65,000) -
----------- -----------
PROFIT FOR THE FINANCIAL PERIOD 1,351,894 878,232
----------- -----------
EARNINGS PER SHARE
Basic 1.9p 1.3p
Fully Diluted 1.8p 1.2p
The profit and loss account includes all recognised gains and losses in the
current and preceding year. All activities were derived from continuing
operations.
ASOS PLC
CONSOLIDATED BALANCE SHEET
AT 31 MARCH 2006
31 March 31 March
2006 2005
# #
FIXED ASSETS
Intangible assets 1,020,148 1,248,398
Tangible assets 990,426 327,315
----------- -----------
2,010,574 1,575,797
CURRENT ASSETS
Stocks 2,563,863 1,587,308
Debtors 2,082,198 1,216,615
Cash at bank and in hand 3,743,551 2,059,581
----------- -----------
8,389,612 4,863,504
CREDITORS: amounts falling due within
one year (5,420,109) (2,827,586)
----------- -----------
NET CURRENT ASSETS 2,969,503 2,035,918
----------- -----------
TOTAL ASSETS LESS CURRENT
LIABILITIES 4,980,077 3,611,715
----------- -----------
CAPITAL AND RESERVES
Called up share capital 2,516,649 2,511,026
Share premium account 3,006,776 2,995,931
Profit and loss account (543,348) (1,895,242)
----------- -----------
SHAREHOLDERS' FUNDS (ALL EQUITY) 4,980,077 3,611,715
----------- -----------
ASOS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
Year ended Year ended
31 March 31 March
2006 2005
# #
Net cash inflow from operating
activities 2,506,977 1,163,364
--------- ---------
Returns on investments and servicing of
finance
Interest received 61,779 38,799
Interest paid (426) (146)
--------- ---------
Net cash inflow from returns on
investments and servicing of finance 61,353 38,653
Investing activities
Payments to acquire tangible fixed assets (904,468) (298,861)
Proceeds from disposal of tangible fixed
assets 3,640 -
--------- ---------
(900,828) (298,861)
NET CASH INFLOW BEFORE FINANCING 1,667,502 903,156
Financing
Net inflow from issue of ordinary shares 16,468 152,307
Net cash inflow from financing 16,468 152,307
INCREASE IN CASH 1,683,970 1,055,463
--------- ---------
RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET DEBT/FUND
Increase in cash for the period 1,683,970 1,055,463
Net funds at 1 April 2005 2,059,581 1,004,118
--------- ---------
Net funds at 31 March 2006 3,743,551 2,059,581
--------- ---------
NOTES TO THE CASH FLOW STATEMENT
Reconciliation of operating profit to net cash inflow from operating activities
Year ended Year ended
31 March 31 March
2006 2005
#
Operating profit 1,355,546 839,579
Amortisation charge 228,334 228,334
Depreciation charge 221,633 87,730
Loss on disposal of fixed assets 16,079 -
Decrease/(increase) in stock (976,555) (1,065,628)
Decrease/(increase) in debtors (930,583) (436,353)
Increase in creditors 2,592,523 1,509,702
--------- ---------
2,506,977 1,163,364
--------- ---------
EARNINGS PER SHARE
The calculations of earnings per share are based on the following:
Year ended 31 Year ended 31
March 2006 March 2005
Profit attributable to shareholders 1,351,894 878,148
Weighted Average number of shares
For basic earnings per share 71,753,281 69,917,012
For diluted earnings per share 74,785,943 73,907,179
No shares have been issued between the year end and date of approval of these
financial statements.
The financial information contained in the preliminary announcement does not
constitute the company's statutory financial statements. The company's auditors
have issued an unqualified report on the statutory financial statements for the
12 months ended 31 March 2006 and have not made any statement under section 237
(2) or (3) of the Companies Act 1985. A copy of the company's statutory
financial statements will be delivered to the Registrar of Companies shortly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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