TIDMASC
RNS Number : 9871D
ASOS PLC
24 May 2012
24 May 2012
ASOS plc
Global Online Fashion Store
Audited Final Results for the year ended 31 March 2012
Summary results table
GBP'000s 2012 2011 Change
------------------------------- ---------------- -------- -------
Group revenues(1) 494,957 339,691 46%
Retail sales 481,562 324,100 49%
UK retail sales 197,859 184,072 7%
International retail sales 283,703 140,028 103%
Gross profit(2) 251,970 166,649 51%
Retail gross margin 49.5% 46.6% 290bps
Gross margin 50.9% 49.1% 180bps
Profit before tax and
exceptional items 40,934 28,648 43%
Profit before tax 30,349 15,705 93%
Diluted underlying earnings
per share(3) 36.3p 25.6p 42%
Diluted earnings per share(4) 26.7p 13.7p 95%
Net funds(5) 19,315 4,679 313%
------------------------------- ---------------- -------- -------
(1) Includes retail sales, delivery receipts and third party
revenues
(2) Distribution costs have been reclassified from cost of sales
to operating expenses from 1 April 2011. Comparative information
has been reclassified accordingly
(3) Underlying earnings per share has been calculated using
profit after tax but before exceptional items
(4) Earnings per share has been calculated using profit after
tax and exceptional items of GBP22.3m (2011: GBP10.8m)
(5) Cash and cash equivalents less bank borrowings
Highlights:
-- Retail sales up 49% (UK retail sales up 7%, International retail sales up 103%)
-- Retail margin up by 290bps and gross margin up by 180bps year on year
-- International retail sales accounted for 59% of total retail
sales (2011: 43%) and 62% in Q4
-- Profit before tax and exceptional items up 43% to GBP40.9m
-- Tight stock management and strong net funds of GBP19.3m
-- New websites launched in Italy, Spain and Australia
-- Warehouse transition completed and delivering significant efficiency gains
Nick Robertson, CEO, commented:
"I am pleased to report another strong year for ASOS, with
retail sales up 49% to GBP481.6m and profit(6) up 43% to
GBP40.9m.
During the year, we successfully launched country specific sites
in Australia, Spain and Italy. We completed the year with further
penetration into existing international markets and substantial
expansion into new territories. Additionally our successful
transition to a new 530,000 sq ft warehouse in Barnsley became
fully operational in June 2011.
We remain positive in our outlook for 2012/13 as we continue our
journey to becoming the world's number one online fashion
destination. Our International roll out continues and our 1:5:5
ambitions for the company are in sight."
(6) Profit before tax and exceptional items
Investor and Analyst Meeting
There will be a meeting for investors and analysts that will
take place at 10am today, 24 May 2012, in The Finsbury Theatre, 4
Chiswell Street, Finsbury Square, London, EC1Y 4UP. A live webcast
will be available at www.asosplc.com.
For further information:
ASOS plc Tel: 020 7756 1017
Nick Robertson, Chief Executive
Nick Beighton, Finance Director
Greg Feehely, Head of Investor Relations
Website: www.asos.com
College Hill Tel: 020 7457 2020
Matthew Smallwood / Justine Warren / Jamie
Ramsay
JPMorgan Cazenove Tel: 020 7742 4000
Luke Bordewich / Gina Gibson
Numis Securities Tel: 020 7260 1000
Alex Ham
Background note
ASOS.com is a global online fashion and beauty retailer and
offers on the ASOS.com website over 50,000 branded and own label
product lines across womenswear, menswear, footwear, accessories,
jewellery and beauty. ASOS has websites targeting the UK, USA,
France, Germany, Spain, Italy and Australia and also ships to over
190 other countries from its central distribution centre in the
UK.
Aimed at fashion forward twenty-somethings globally, ASOS
attracts 17.5 million unique visitors a month and as at 31 March
2012 had 8.0 million registered users and 4.4 million active
customers from 160 countries (defined as having shopped in the last
12 months).
www.asos.com
www.us.asos.com
www.asos.de
www.asos.fr
www.asos.com/au
www.asos.it
www.asos.es
m.asos.com
marketplace.asos.com
fashionfinder.asos.com
ASOS plc ("the Group")
Global Online Fashion Store
Final Results for the year ended 31 March 2012
Business Review
We have had another successful year, with Group revenues up 46%
to GBP495.0m (2011: GBP339.7m) and profit before tax and
exceptional items up 43% on the prior year at GBP40.9m (2011:
GBP28.6m). Profit before tax, which includes one-off costs relating
to the warehouse transition, increased GBP14.6m to GBP30.3m (2011:
GBP15.7m).
Total retail sales grew 49% to GBP481.6m (2011: GBP324.1m). The
key driver of retail sales growth continues to be our International
business (up 103%), although UK growth remains solid with sales up
7% on last year. The international portion of our retail sales mix
has continued to increase during the year and accounted for 59% of
total retail sales (2011: 43%).
Our retail gross margin improved by 290bps in the year and our
overall gross margin improved by 180bps to 50.9% (2011: 49.1%). Our
rapid and profitable global expansion continues with the launch of
three new country websites over the period in Australia, Spain and
Italy, as well as the establishment of our first overseas marketing
office in Australia. We also continued our investment in our global
free shipping proposition. The next stage in our international
development is to introduce other small in-country teams to amplify
our marketing efforts in the countries where we have websites.
We remain committed to our goal of achieving GBP1bn sales from
five major markets by 2015. All our International markets are
performing strongly and our unique position on the global stage of
Internet apparel retailers is now firmly established. We are the
second most visited apparel site on the planet on a daily basis
(for 15-34 year olds) and as at March 2012, 69% of our traffic is
derived from outside the UK, up from 58% a year ago.
Products
We are committed to establishing ASOS as the world's number one
online fashion destination for twenty-somethings. We continuously
refine our product range and our pricing architecture to ensure it
is focused on the fashion minded twenty-something. That requires
ASOS to be increasingly diligent in areas such as sourcing and
markdown management as well as continually augmenting our retail
disciplines to deliver gross margin efficiency that subsequently
can be reinvested in customer proposition and / or pricing, as
appropriate. We believe in our product collections offering greater
value to the ASOS customer relative to the marketplace, whilst
refusing to compromise on fashionability or product quality.
During the last financial year, 'ASOS' own-label brand firmly
established its own credentials as a global fashion brand. Whilst
the sale of third party brands remains important both to ASOS and
our customers, the 'ASOS' own-label brand provides us with a unique
offering that is sought after both in the UK and even more so
internationally. Sales of the 'ASOS' own-label brands now account
for c55% of total sales, up 100bps from the previous year, and we
continue to invest in the price points and quality to support this
growth.
Menswear grew particularly strongly (up c60%) and is helping to
diversify the Group's revenue streams. Whilst demanding different
styles and approaches, fashion is just as important to
twenty-something men as to their female counterparts and ASOS is
increasingly becoming a destination of choice for that audience.
Womenswear is a more competitive market, which demands that ASOS is
at the top of its game from a fashion, buying and merchandising and
marketing perspective. During the course of the year we have
restructured and refocused our pricing architecture which commenced
in March 2012. Our global customer base will benefit from this
through the course of the current year.
Management
Our Chairman, Lord Waheed Alli, has notified the Board of his
intention to step down and leave the Company once his successor has
been identified. Waheed has been with the company for 12 years
during which time he has played an important role. As such we are
all immensely grateful to him. The search for his successor is
currently underway.
During the year, we made significant investment to further
strengthen our management capabilities in order to seize upon as
many of the opportunities available to the Group as possible. From
a senior management perspective, in the last 12 months ASOS has
hired a new People & Services Director, Trading Director,
General Counsel & Company Secretary and Head of Investor
Relations to supplement the existing management capability. These
efforts will continue and we will look to strengthen both our
supply chain and sourcing resource, amongst other areas, to ensure
that the executive team has the diversity of skills, mind-sets and
capabilities which the business needs to thrive and to support our
rate of growth. In addition to these people changes, we replaced
our legacy buying and merchandising system with a tier one solution
and over 235 new staff were recruited over the period, principally
in our Retail, International, Customer Care and IT departments.
Operations
Investment in operations also took place during the year as we
continue to refine and develop ASOS's strong business model. We
have continued our investment in returns and delivery. We
introduced a new third party operated returns hub in Sydney which
has improved delivery times even further. New improved delivery
times are most notable in the US where we have speeded up the
delivery for our customers by 2 days.
Additionally, several capacity enhancing initiatives were
delivered over the period. Our logistical constraints were removed
by our re-location to the new single state-of-the-art distribution
facility in Barnsley. Cost and time efficiencies from that
investment are already being realised and we believe there will be
more to come as we gain more understanding of the opportunities
this facility offers. This new facility will more than satisfy our
capacity requirements for the foreseeable future and support our
GBP1bn sales goal.
Over the past four years we have invested over GBP35m in
ensuring that our technology is of the highest standard and
state-of-the-art. We know our customers value the depth and breadth
of choice that online operations can offer. We aim to improve the
ease of shopping through our sites, which is why we are committed
to technology re-platforming. We are intent on driving our
technology to become device agnostic, so that customers can browse
from their laptop, desktop, mobile, iPad or Android device on a
24/7 basis, wherever they are. Work is also underway to enable the
ASOS platform, both front and back end, to handle all language
character sets rather than just western. A quicker, but less
efficient, route to market would have been to build these sites
independently however that would have resulted in a number of
separate platforms for countries such as China and Russia.
Developing the single ASOS platform will provide a better and more
effective solution in the long term. Progress continues in building
the infrastructure, on the previously indicated timeframe.
Our strategy of 'shop to destination' continues with both our
Marketplace and Fashion Finder sites significantly enhancing the
ASOS customer experience. During the year we rolled out Marketplace
to our International sites and now promote product from a number of
international boutiques. We also launched the ASOS Magazine and
shopping apps to exploit the growing trend of mobile browsing; 16%
of ASOS traffic is now via mobile. We see the role of ASOS to be
much more than a shop; it is also a key part of the fashion media
and is a technical enabler of all things fashion, competing for a
percentage of our twenty-something customer's time as well as an
increasing percentage of their fashion purse. A number of
initiatives are planned over the coming months to continue to
deliver on this goal.
Trading operations
The Group has achieved another strong performance during 2012
with sales and profit growth across all territories, particularly
internationally. International sales now account for 59% of total
retail sales compared to 43% in the previous year.
Revenue
International
---------------------- -------- ------------
GBP'000s UK USA EU RoW Total Group Total
---------------------- -------- ------- -------- -------- -------- ------------
Retail sales 197,859 39,959 106,993 136,751 283,703 481,562
Growth 7% 114% 46% 185% 103% 49%
Delivery receipts 7,073 825 1,449 1,430 3,704 10,777
Growth 4% 30% (53%) (44%) (41%) (18%)
Third party revenues 2,555 10 25 28 63 2,618
Growth 2% 4%
Group revenues 207,487 40,794 108,467 138,209 287,470 494,957
Growth 7% 112% 42% 173% 96% 46%
---------------------- -------- ------- -------- -------- -------- ------------
Total Group revenue increased 46%, with total retail sales up
49% on last year, driven by 103% growth in our International retail
sales. In the final quarter, we annualised our investment in global
free shipping which led, as anticipated, to lower year on year
International sales growth, at 63% in the final quarter.
The Rest of the World segment was the fastest growing segment
within retail sales at 185%, boosted by strong sales from Australia
(where we have maintained our first place Comscore position),
Russia, Singapore and China amongst others. We introduced a country
specific Australian website midway through the year, which has
contributed to the strong growth in this territory and have
recently opened a small marketing office in Sydney. Growth in our
other territories was also driven by a full year's contribution
from our other country specific websites in the USA, France and
Germany, introduced in autumn 2010, together with our Italian and
Spanish websites which were introduced in September 2011. All seven
country-specific sites are performing well, with visitors, orders
and average selling price significantly up year on year. Based on
Comscore data, we have risen in the USA to 29th at March 2012
(March 2011: 37th), in Germany to 17th (March 2011: 26th), and in
both Spain and Italy we are ninth.
Despite the challenging economic environment facing all of our
customers, particularly in the UK, retail sales grew in the UK by
7% in the period and according to Comscore, we remain first in the
UK for the 15-34 age range.
As anticipated, delivery receipts reduced year on year by 18%
due to the continued investment in our global free ship delivery
proposition. This annualised in the USA in August 2011 and in the
rest of the world in January 2012, leading to an overall decline in
international delivery receipts of 41%. In the UK, free style saver
delivery has been part of the customer proposition since April 2010
consequently UK delivery receipts increased due to increased retail
sales and take-up of ASOS Premier.
Third party revenues, which mainly comprise advertising revenues
from the website and the ASOS magazine, increased by 4% in the year
to GBP2.6m.
Trading Key Performance Indicators
Active customer numbers increased in all our markets year on
year with total numbers up by 38%, to c4.4 million. ASOS now has as
many International active customers as it does in the UK, which
demonstrates the extent of our International expansion, but there
is still significant opportunity within the global twenty-something
market. The number of orders also increased by 52% and average
product selling price was up 4%. The declines in average basket
value of 6% and average units per basket of 9% are in line with
expectations and are a direct consequence of our investment in
global free delivery to drive future growth and also frequency of
purchase.
International
Group
KPIs UK USA EU RoW Total Total
-------------------------- --------- --------- --------- --------- --------- ---------
Average basket value(1) GBP65.11 GBP59.23 GBP63.10 GBP61.99 GBP62.03 GBP63.58
Growth 1% (4%) (15%) (27%) (17%) (6%)
Average units per basket 2.25 2.23 2.42 2.55 2.44 2.35
Growth (7%) (6%) (17%) (27%) (18%) (9%)
Average selling price
per unit(1) GBP28.88 GBP26.57 GBP26.11 GBP24.35 GBP25.42 GBP27.09
Growth 8% 2% 3% - 1% 4%
Number of orders ('000) 5,937 927 2,532 2,415 5,874 11,811
Growth 10% 141% 80% 286% 143% 52%
Unique visitors ('000)
(2) 17,500
Growth 35%
Total visits ('000)
(2) 14,656 6,060 13,796 12,648 32,504 47,160
Growth (3%) 65% 34% 77% 54% 30%
Active customers ('000)
(3) 2,190 445 1,000 740 2,185 4,375
Growth 5% 109% 63% 190% 102% 38%
-------------------------- --------- --------- --------- --------- --------- ---------
(1) Including VAT
(2) During March 2012
(3) As at 31 March 2012 defined as having shopped with ASOS
during the last 12 months
Gross profit
The Group generated gross profit of GBP252.0m (2011: GBP166.6m),
up 51% on last year.
International
--------------------- ------- --------
Group
GBP'000s UK USA EU RoW Total Total
--------------------- ------- ------- ------- ------- -------- --------
Gross profit 99,173 24,698 54,514 73,585 152,797 251,970
Growth 9% 126% 44% 177% 103% 51%
Retail gross margin 45.3% 59.7% 49.6% 52.7% 52.5% 49.5%
Change 70bps 450bps 220bps 280bps 320bps 290bps
Gross margin 47.8% 60.5% 50.3% 53.2% 53.2% 50.9%
Change 60bps 380bps 80bps 80bps 170bps 180bps
--------------------- ------- ------- ------- ------- -------- --------
Note: From 1 April 2011, the Group has reclassified delivery
costs from cost of sales to operating expenses to reflect their
increasing deployment as a marketing expenditure. Prior year
comparatives have been reclassified accordingly.
The Group retail gross margin increased by 290bps to 49.5%
(2011: 46.6%) as a result of improved buying and markdown
management as we continue to improve our retail disciplines, as
well as the increase in the mix of International sales, which have
a stronger margin due to a higher mix of own brand purchases. Gross
margin improved by 180bps to 50.9% (2011: 49.1%) as the
improvements in retail margin were offset by the reduction in
delivery receipts.
Investment in our operating resources
The Group increased its investment in its operating resources
and capability by 53% to GBP210.2m, excluding exceptional items.
Total operating costs ratio improved by 110bps excluding investment
in our customer delivery proposition.
GBP'000s 2012 2011 Change
--------------------------------------- -------- -------- -------
Distribution costs 65,840 34,959 88%
Payroll and staff costs 46,726 35,717 31%
Warehousing 32,317 22,543 43%
Marketing 19,728 14,280 38%
Production 3,347 2,621 28%
Technology costs 10,074 5,629 79%
Other operating costs 24,080 17,118 41%
Depreciation 8,074 4,932 64%
--------------------------------------- -------- -------- -------
Operating costs excluding exceptional
items 210,186 137,799 53%
Operating costs excluding delivery
costs and exceptional items 144,346 102,840 40%
% of sales excluding distribution
costs 29.2% 30.3% 110bps
--------------------------------------- -------- -------- -------
Delivery and returns solutions are a cornerstone of our
international growth strategy and customer proposition. As a result
we continued to invest in our delivery proposition and in
particular our global free shipping commitment. Distribution costs
have, as a result, increased by 88% year on year due to increased
order numbers and in particular International orders.
Payroll and staff costs have increased by 31%, as we continue to
benefit from economies of scale and deliver operating cost
leverage. We continued to invest in headcount in our key areas of
IT, Retail and International as well as expanding our Customer Care
resources to service our increasing global customer base.
The transition to our new warehouse in Barnsley was another
milestone for ASOS and was completed on time with minimal customer
service disruption. The warehouse operation is already achieving
significant efficiency gains, despite limited changes to the labour
intensive operating model of the previous warehouse, through the
benefits of greater scale and productivity improvements. In
addition, during the year, we introduced a further local returns
solution in Sydney, Australia, operated by a third party and
designed to service our customers in this country more
efficiently.
Technology costs have increased by 79% on prior year to GBP10.1m
as a result of our continued investment in underlying
infrastructure and innovation, as in previous years. The increase
in other operating costs during the year was driven by increased
credit card handling fees resulting from the number of transactions
processed and increased property costs from additional head office
space acquired in the prior year.
Group Profit
The Group generated profit before tax and exceptional items up
43% on prior year at GBP40.9m (2011: GBP28.6m).
GBP'000s 2012 2011 Change
------------------------------------------ ---------- ---------- -------
Revenue 494,957 339,691 46%
Cost of sales* (242,987) (173,042)
------------------------------------------ ---------- ---------- -------
Gross profit* 251,970 166,649 51%
Distribution costs excluding exceptional
items* (65,840) (34,959)
Administrative expenses excluding
exceptional items (144,346) (102,840)
------------------------------------------ ---------- ---------- -------
Operating profit before exceptional
items 41,784 28,850 45%
Share of post tax losses of joint
venture - (3)
Net finance (costs)/income (850) (199)
------------------------------------------ ---------- ---------- -------
Profit before tax and exceptional
items 40,934 28,648 43%
Exceptional items (10,585) (12,943)
Profit before tax 30,349 15,705 93%
Income tax expense (8,070) (4,856)
------------------------------------------ ---------- ---------- -------
Profit after tax 22,279 10,849 105%
------------------------------------------ ---------- ---------- -------
* From 1 April 2011, the Group has reclassified delivery costs
from cost of sales to operating expenses to reflect their
increasing deployment as a marketing expenditure. Prior year
comparatives have been reclassified accordingly.
Exceptional items
Exceptional costs of GBP10.6m reflect the remaining direct costs
of the transition to our new warehouse which is now completed and
fully operational. This includes dual site decollation costs,
relocation costs, staff training, and vacant property costs on our
legacy warehouses, as well as an impairment charge of GBP2.8m. The
impairment charge relates to assets in our legacy warehouse which
were classified as held-for-sale at 31 March 2011 at their net
realisable value of GBP2.8m based on an independent valuation. No
buyer has been found for these assets during the year to 31 March
2012, therefore these assets have been impaired to a carrying value
of GBPnil.
The cash outflow during the year as a result of exceptional
costs was GBP10.2m.
The main components of the exceptional charge to the profit and
loss account are as follows:
GBP'000s 2012 2011
------------------------------ ------- -------
Dual site decollation costs* 5,385 2,088
Pre go-live occupancy and
employee costs 965 7,830
Vacant property costs 1,435 -
Impairment of assets 2,800 3,025
Total 10,585 12,943
------------------------------ ------- -------
* Included within dual site decollation costs are delivery costs
of GBP2,258,000 (2011: GBPnil) which have been classified within
distribution expenses in the statement of comprehensive income. The
remaining exceptional costs have been included within
administrative expenses.
Taxation
The effective tax rate (pre exceptional items) for the Group was
26.1%, 300bps lower than last year. Including exceptional items the
effective tax rate was 26.6% (2011: 30.9%). Going forward, we would
expect the effective rate of tax pre exceptional items to be around
1% higher than the prevailing UK corporation tax rate.
Earnings per share
Basic underlying earnings per share(1) increased by 46% to 39.8p
per share (2011: 27.3p), and diluted underlying earnings per
share(1) increased by 42% to 36.3p per share (2011: 25.6p).
Basic earnings per share(2) increased by 101% to 29.3p per share
(2011: 14.6p), and diluted earnings per share(2) increased by 95%
to 26.7p per share (2011: 13.7p).
The dilution calculation includes 2.0m shares to be issued under
the Management Incentive Plan ("MIP") in September 2012 and 2.0m
shares to be issued under the MIP in September 2013, according to
TSR and EPS performance criteria achieved at the end of the
scheme's performance period (3 years ended 31 March 2012).
(1) Underlying earnings per share has been calculated using
profit after tax but before exceptional items.
2 Earnings per share has been calculated using profit after tax
and exceptional items.
Dividend
The Board is of the opinion that shareholder's interests are
best served by continuing to reinvest the cash generated by the
business to exploit the substantial global growth opportunities
both in the UK and Internationally. Accordingly, it has decided not
to pay a dividend for the year ended 31 March 2012. This policy
remains under regular review.
Statement of Financial Position
The Group has a strong financial position including a strong
cash balance and a clean stock position. Net assets increased by
GBP23.1m to GBP95.2m (2011: GBP72.1m), driven by the increase in
profit after tax for the period.
Statement of Cash Flows
The Group's cash balance was GBP24.3m at 31 March 2012, up from
GBP4.7m at 31 March 2011. Net funds were GBP19.3m (31 March 2011:
GBP4.7m). The summary cash flow is detailed below.
GBP'000s 2012 2011
------------------------------------------------------------------ --------- ---------
Operating profit 31,199 15,907
Exceptional items 10,585 12,943
------------------------------------------------------------------ --------- ---------
Operating profit before exceptional items 41,784 28,850
Depreciation and amortisation 8,074 4,932
Working capital (3,866) (7,541)
Share based payments charges 648 1,165
Tax received/(paid) 1,012 (5,509)
------------------------------------------------------------------ --------- ---------
Cash in/(out)flow from operating profit before exceptional items 47,652 21,897
Operating cash outflow relating to exceptional items (10,152) (6,615)
------------------------------------------------------------------ --------- ---------
Cash in/(out)flow from operating profit 37,500 15,282
Capital expenditure (21,587) (25,743)
Proceeds from issue of ordinary shares 593 1,100
Net purchase of own shares by Employee Benefit Trust (1,592) (1,406)
Drawdown of revolving credit facility 5,000 -
Net interest (paid)/received (278) (199)
Total cash in/(out)flow 19,636 (10,966)
------------------------------------------------------------------ --------- ---------
Cash generated from operating profit increased by GBP22.2m, as a
result of an increase in operating profit before exceptional items
of GBP12.9m, an improvement of GBP3.6m in cash flows from working
capital and a favourable variance in corporation tax cash flows of
GBP6.5m.
The Group has continued to monitor working capital tightly,
resulting in an improvement in the cash outflow from working
capital from GBP7.5m to GBP3.9m. The working capital movement is
primarily as a result of tighter stock management.
Capital expenditure was GBP21.6m, GBP4.2m lower than last year.
The Group had drawn down GBP5.0m under its revolving credit
facility agreement at year end.
Our investments are funded by operating cash flows, with
additional short term and medium term facilities to support working
capital movement and planned capital expenditure. At 31 March 2012,
the Group had in place a GBP10.0m revolving credit facility which
is available until February 2013.
Fixed asset additions
GBP'000 2012 2011
----------------------------- ------- -------
IT 15,874 9,726
Office fixtures and fit-out 2,157 977
Warehouse 3,274 17,781
Total 21,305 28,484
----------------------------- ------- -------
The majority of fixed asset additions were related to
improvements in our IT infrastructure. The main areas of investment
were on our new buying and merchandising system which launched in
September 2011, underlying infrastructure improvements and on our
three new international websites. We have invested GBP3.3m in the
new distribution centre during the year.
Change in accounting reference date
As announced on 26 April 2012, the Group has changed its
accounting reference date and financial year end from 31 March to
31 August. The Board took this decision to enable the Company's
external reporting period to align with the buying seasons of the
fashion industry. The Board will report its next audited results
for the 5 month period to 31 August 2012 by the end of October
2012.
Outlook
We remain positive in our outlook for 2012/13 as we continue our
journey to becoming the world's number one online fashion
destination. Our International roll out continues and our 1:5:5
ambitions for the Group are in sight.
Nick Robertson Nick Beighton
Chief Executive Officer Finance Director
Audited Consolidated Statement of Comprehensive Income
For the year ended 31 March 2012
Year to 31 March 2012 Year to 31 March 2011
Reclassified(1)
Before exceptional Exceptional Total Before Exceptional Total
items items exceptional items
items
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 494,957 - 494,957 339,691 - 339,691
Cost of sales (242,987) - (242,987) (173,042) - (173,042)
------------------- ------------ ---------- ------------- ------------ ----------
Gross profit 251,970 - 251,970 166,649 - 166,649
Distribution
expenses (65,840) (2,258) (68,098) (34,959) - (34,959)
Administrative
expenses (144,346) (8,327) (152,673) (102,840) (12,943) (115,783)
------------------- ------------ ---------- ------------- ------------ ----------
Operating
profit 41,784 (10,585) 31,199 28,850 (12,943) 15,907
Share of post
tax losses
of joint venture - - - (3) - (3)
Finance income - - - 16 - 16
Finance expense (850) - (850) (215) - (215)
------------------- ------------ ---------- ------------- ------------ ----------
Profit before
tax 40,934 (10,585) 30,349 28,648 (12,943) 15,705
Income tax
(expense)/credit (10,685) 2,615 (8,070) (8,337) 3,481 (4,856)
Profit after
tax and total
comprehensive
income attributable
to owners
of the parent 30,249 (7,970) 22,279 20,311 (9,462) 10,849
=================== ============ ========== ============= ============ ==========
Earnings per
share(2)
Basic 29.3p 14.6p
Diluted 26.7p 13.7p
------------------------ ------ ---- ---------------
Underlying earnings per share(3)
Basic 39.8p 27.3p
Diluted 36.3p 25.6p
-------- ------------------ ------ --------- ----------
1 Distribution costs have been reclassified from cost of sales
to operating expenses from 1 April 2011. Comparative information
has been reclassified accordingly (note 1).
2 Earnings per share is calculated in accordance with IAS 33
'Earnings per share' and includes exceptional items.
(3) Underlying earnings per share excludes exceptional
items.
Audited Consolidated Statement of Changes in Equity
For the year ended 31 March 2012
Employee
Called Benefit
up share Share Retained Trust Total
capital premium earnings(1) reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 April
2010 2,617 4,138 41,920 (3,197) 45,478
Shares allotted in
the year 44 1,056 - - 1,100
Purchase of shares
by Employee
Benefit Trust - - - (1,406) (1,406)
Employee share schemes - - (163) 1,328 1,165
Total comprehensive
income - - 10,849 - 10,849
Deferred tax on share
options - - 10,199 - 10,199
Current tax on items
taken directly to
equity - - 4,735 - 4,735
Balance as at 31
March 2011 2,661 5,194 67,540 (3,275) 72,120
========== =========== ============= ========= =========
Shares allotted in
the year 38 555 - - 593
Purchase of shares
by Employee
Benefit Trust - - - (1,592) (1,592)
Employee share schemes - - (1,287) 1,935 648
Total comprehensive
income - - 22,279 - 22,279
Deferred tax on share
options - - (6,386) - (6,386)
Current tax on items
taken directly to
equity - - 7,573 - 7,573
Balance as at 31 March
2012 2,699 5,749 89,719 (2,932) 95,235
====== ====== ======== ========= =========
(1) Retained earnings includes the share-based payments
reserve
Audited Consolidated Statement of Financial Position
As at 31 March 2012
2012 2011
GBP'000 GBP'000
Non-current assets
Goodwill 1,060 1,060
Other intangible assets 19,959 9,529
Property, plant and equipment 27,694 24,893
Deferred tax asset 9,876 16,877
------------ ---------
58,589 52,359
------------ ---------
Current assets
Inventories 80,574 66,094
Trade and other receivables 19,503 10,122
Current tax asset 2,018 2,914
Cash and cash equivalents 24,315 4,679
------------ ---------
126,410 83,809
------------ ---------
Assets of disposal group classified
as held for sale - 2,800
Current liabilities
Trade and other payables (83,829) (64,947)
Revolving credit facility (5,000) -
Provisions (935) (1,901)
(89,764) (66,848)
------------ ---------
Net current assets 36,646 19,761
Net assets 95,235 72,120
============ =========
Equity attributable to owners of
the parent
Called up share capital 2,699 2,661
Share premium 5,749 5,194
Employee Benefit Trust reserve (2,932) (3,275)
Retained earnings 89,719 67,540
Total equity 95,235 72,120
============ =========
Audited Consolidated Statement of Cash Flows
For the year ended 31 March 2012
31 March 31 March
2012 2011
GBP'000 GBP'000
Operating profit 31,199 15,907
Adjusted for:
Operating exceptional items 10,585 12,943
Depreciation of property, plant and
equipment 4,937 3,290
Amortisation of other intangible
assets 3,137 1,642
Increase in inventories (14,480) (28,366)
Increase in trade and other receivables (9,381) (5,119)
Increase in trade and other payables 19,995 25,944
Share-based payments charges 648 1,165
Income taxes received/(paid) 1,012 (5,509)
--------- ---------
Net cash generated from operating
activities before exceptional items 47,652 21,897
Cash outflow relating to exceptional
operating items (10,152) (6,615)
--------- ---------
Net cash generated from operating
activities 37,500 15,282
Investing activities
Payments to acquire other intangible
assets (12,669) (7,748)
Payments to acquire property, plant
and equipment (8,918) (17,995)
Finance income - 16
--------- ---------
Net cash outflow used in investing
activities (21,587) (25,727)
Financing activities
Proceeds from issue of ordinary shares 593 1,100
Purchase of own shares by Employee
Benefit Trust (1,592) (1,406)
Drawdown of revolving credit facility 5,000 -
Finance expense (278) (215)
--------- ---------
Net cash generated/(used) in financing
activities 3,723 (521)
Net (decrease)/increase in cash and
cash equivalents 19,636 (10,966)
========= =========
Opening cash and cash equivalents 4,679 15,645
Closing cash and cash equivalents 24,315 4,679
========= =========
Reconciliation of net cash flow to movement in net
funds/(debt)
31 March 31 March
2012 2011
GBP'000 GBP'000
Net funds at beginning of the period 4,679 15,645
Increase/(decrease) in cash and cash
equivalents 19,636 (10,966)
Increase in net debt (5,000) -
--------- ---------
Net funds at end of the period 19,315 4,679
========= =========
Notes to the Financial Information
1. Preparation of the audited condensed consolidated financial
information
a) Basis of preparation
Whilst the information included in this audited condensed
consolidated financial information ("preliminary announcement") has
been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRSs")
as adopted for use in the European Union and as issued by the
International Accounting Standards Board, this preliminary
announcement does not itself contain sufficient information to
comply with IFRSs.
The financial information contained within this preliminary
announcement for the 12 months to 31 March 2012 and 12 months to 31
March 2011 do not comprise statutory financial statements within
the meaning of section 434 the Companies Act 2006. The Annual
Report and Accounts 2011 have been filed with the Registrar of
Companies and those for the 12 months to 31 March 2012 will be
filed following the Company's annual general meeting. The
preliminary announcement for the 12 months to 31 March 2012 has
been prepared on a consistent basis with the financial accounting
policies set out in the Accounting Policies section of the ASOS Plc
Annual Report and Accounts 2012.
The condensed consolidated financial information should be read
in conjunction with the Group's Annual Report and Accounts for the
year ended 31 March 2012, which have been prepared in accordance
with IFRSs as adopted by the European Union. The auditors' report
on those accounts was unqualified, did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying the report and did not contain statements under
s498(2) or s498(3) of the Companies Act 2006.
The Group's business activities together with the factors that
are likely to affect its future developments, performance and
position are set out in the Business Review. The Business Review
describes the Group's financial position, cash flows and borrowing
facilities and also highlights the principal risks and
uncertainties facing the Group. The Annual Report and Accounts 2012
includes the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposures to credit
risk and liquidity risk.
The directors have reviewed current performance and forecasts,
combined with expenditure commitments, including capital
expenditure. After making enquiries, the directors have a
reasonable expectation that the Group has adequate financial
resources to continue its current operations, including contractual
and commercial commitments for the foreseeable future despite the
current uncertain economic outlook. For this reason, they have
continued to adopt the going concern basis in preparing the
financial statements.
In preparing the preliminary announcement, the Directors have
also made reasonable and prudent judgements and estimates and
prepared the preliminary announcement on the going concern basis.
The preliminary announcement and management report contained herein
give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Group.
b) Accounting policies
The Financial Statements have been prepared in accordance with
the accounting policies set out in the 2012 Annual Report and
Accounts, except as described below.
From 1 April 2011, the Group has reclassified delivery costs
from cost of sales to operating expenses to reflect the increasing
deployment of delivery costs as a marketing expenditure.
Comparative information has been reclassified accordingly. The
impact of this reclassification for the year to 31 March 2011 is as
follows:
Year to 31 March 2011
Reported Adjustment Revised
-------------------------- ---------- ----------- ----------
Gross profit 131,690 34,959 166,649
Distribution expenses* - (34,959) (34,959)
Administrative expenses* (102,840) - (102,840)
-------------------------- ---------- ----------- ----------
Operating profit 28,850 - 28,850
-------------------------- ---------- ----------- ----------
* Excluding exceptional items
With effect from September 2011, the Group has changed its
policy for valuation of inventories from a first-in-first-out basis
to a weighted average cost basis as this is deemed to more
effectively match current costs and current revenues in the
statement of comprehensive income. Due to rapid inventory turnover,
the impact of this change in valuation basis on the inventory held
by the Group at 31 March 2012 is immaterial. The impact on the
carrying value of inventories as at 31 March 2011 and 31 March 2010
is immaterial therefore prior year comparatives have not been
restated.
c) Exceptional items
The Group separately identifies and discloses significant
one-off or unusual items which can have a material impact on
absolute profits. These are termed 'exceptional items' and are
disclosed separately in the statement of comprehensive income in
order to provide an understanding of the Group's underlying
financial performance. Exceptional items are judgemental in their
nature and may not be comparable to similarly titled measures used
by other companies. Further details of exceptional items are
included in Note 3 to this release.
2. Segmental analysis
IFRS 8 'Operating Segments' requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker ("CODM"). The CODM has been determined to
be the Executive Board. The Executive Board has determined that the
primary segmental reporting format is geographical by customer
location, based on the Group's management and internal reporting
structure. The Executive Board assesses the performance of each
segment based on revenue and gross profit after distribution
expenses, which excludes administrative expenses and exceptional
items.
2012
UK USA EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 197,859 39,959 106,993 136,751 481,562
Delivery Receipts 7,073 825 1,449 1,430 10,777
Third party revenues 2,555 10 25 28 2,618
---------- --------- --------- --------- ----------
Total revenue 207,487 40,794 108,467 138,209 494,957
Cost of sales (108,314) (16,096) (53,953) (64,624) (242,987)
---------- --------- --------- --------- ----------
Gross profit 99,173 24,698 54,514 73,585 251,970
Distribution costs (17,890) (11,037) (16,227) (20,686) (65,840)
---------- --------- --------- --------- ----------
Segment result 81,283 13,661 38,287 52,899 186,130
Administrative expenses (144,346)
----------
Operating profit before
exceptional items 41,784
Exceptional items (10,585)
Finance expense (850)
----------
Profit before tax 30,349
==========
2011
(Reclassified, see note
1)
UK USA EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 184,072 18,642 73,385 48,001 324,100
Delivery Receipts 6,814 634 3,063 2,574 13,085
Third party revenues 2,506 - - - 2,506
---------- --------- --------- --------- ----------
Total revenue 193,392 19,276 76,448 50,575 339,691
Cost of sales (reclassified) (102,044) (8,354) (38,587) (24,057) (173,042)
---------- --------- --------- --------- ----------
Gross profit (reclassified) 91,348 10,922 37,861 26,518 166,649
Distribution costs (reclassified) (15,471) (3,982) (8,712) (6,794) (34,959)
---------- --------- --------- --------- ----------
Segment result 75,877 6,940 29,149 19,724 131,690
Administrative expenses (102,840)
----------
Operating profit before
exceptional items 28,850
Exceptional items (12,943)
Share of post tax losses
of joint venture (3)
Finance income 16
Finance expense (215)
----------
Profit before tax 15,705
==========
Due to the nature of its activities, the Group is not reliant on
any individual major customers.
No analysis of the assets and liabilities of each operating
segment is provided to the CODM in the monthly management accounts
therefore no measure of segments assets or liabilities is disclosed
in this note.
There are no material non-current assets located outside the
UK.
3. Exceptional items
During the year to 31 March 2012, exceptional costs of GBP10.6
million were charged to operating expenses to reflect the remaining
direct costs of the reorganisation of distribution following the
leasing of a new distribution centre to meet the increasing
capacity needs of the business.
The main components of the exceptional charge are as
follows:
Year to Year to
31 March 31 March
2012 2011
GBP'000 GBP'000
Dual site decollation costs 5,385 2,088
Pre go-live occupancy and
employee costs 965 7,830
Vacant property costs 1,435 -
Impairment of assets 2,800 3,025
---------- ----------
Total 10,585 12,943
========== ==========
Included within dual site decollation costs are delivery costs
of GBP2,258,000 (2011: GBPnil) which have been classified within
distribution expenses in the statement of comprehensive income. The
remaining exceptional costs have been included within
administrative expenses.
4. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of the Parent Company by the weighted
average number of ordinary shares in issue during the year. Own
shares held by the ASOS.com Limited Employee Benefit Trust are
eliminated from the weighted average number of ordinary shares.
Diluted earnings per share amounts are calculated by dividing
the profit attributable to the owners of the Parent Company by the
weighted average number of ordinary shares in issue during the
year, adjusted for the effects of potentially dilutive share
options.
2012 2011
No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for
basic earnings per share 75,914,855 74,375,042
Effect of dilutive options 7,405,148 4,844,159
-------------- --------------
Weighted average shares in issue for
diluted earnings per share 83,320,003 79,219,201
============== ==============
2012 2011
GBP'000 GBP'000
Earnings
Underlying earnings attributable to
shareholders 30,249 20,311
Exceptional items net of related taxation (7,970) (9,462)
---------------- ----------------
Earnings attributable to shareholders 22,279 10,849
================ ================
2012 2011
pence Pence
Basic earnings per share
Underlying earnings per share (note
i) 39.8 27.3
Exceptional items net of taxation (10.5) (12.7)
---------------- ----------------
Earnings per share (note ii) 29.3 14.6
================ ================
2012 2011
Pence Pence
Diluted earnings per share
Underlying earnings per share (note
i) 36.3 25.6
Exceptional items net of taxation (9.6) (11.9)
---------------- ----------------
Earnings per share (note ii) 26.7 13.7
================ ================
i) Underlying earnings per share has been calculated using
profit after tax but before exceptional items.
ii) Earnings per share has been calculated using profit after
tax and exceptional items.
The dilution calculation includes 2.0m shares to be issued under
the MIP in September 2012 and 2.0m shares to be issued under the
MIP in September 2013, according to vesting criteria achieved on 31
March 2012, the end of the scheme's performance period.
5. Analysis of net debt
2012 2011
GBP'000 GBP'000
Net movement in cash and cash
equivalents 19,636 (10,966)
Cash flow from drawing of
revolving credit facility (5,000) -
-------------- ---------
Net movement in net funds 14,636 (10,966)
Opening net funds 4,679 15,645
-------------- ---------
Closing net funds 19,315 4,679
============== =========
Closing net funds comprises:
Cash and cash equivalents 24,315 4,679
Drawings under revolving credit
facility (5,000) -
-------------- ---------
Net funds 19,315 4,679
============== =========
The revolving credit facility of GBP10.0m, of which GBP5.0m was
drawn at 31 March 2012, is available until February 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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