TIDMASC
RNS Number : 5302D
ASOS PLC
30 April 2013
30 April 2013
ASOS plc
Global Online Fashion Destination
Interim Results for the six months ended 28 February 2013
Summary results table
GBP'000s H1 H1 Change
2012/13 2011/12
----------------------------------- -------------------- ------------------- --------
Group revenues(1) 359,731 269,926 33%
Retail sales 352,263 262,921 34%
UK retail sales 137,579 108,967 26%
International retail sales 214,684 153,954 39%
Gross profit 179,604 137,190 31%
Retail gross margin 48.9% 49.5% (60bps)
Gross margin 49.9% 50.8% (90bps)
Profit before tax and exceptional
items 25,694 23,134 11%
Profit before tax 25,694 21,626 19%
Diluted underlying earnings
per share(2) 23.3 20.5 14%
Diluted earnings per share(3) 23.3 19.1 22%
Net funds(4) 45,224 12,718 256%
----------------------------------- -------------------- ------------------- --------
(1) Includes retail sales, delivery receipts and third party
revenues
(2) Underlying earnings per share has been calculated using
profit after tax but before exceptional items
(3) Earnings per share has been calculated using profit after
tax including exceptional items of GBPnil (2012: GBP1.5m)
(4) Cash and cash equivalents less bank borrowings
Highlights:
-- Retail sales up 34% (UK retail sales up 26%, International retail sales up 39%)
-- Retail gross margin down by 60bps and gross margin down by 90bps
-- International retail sales accounted for 61% of total retail sales (2012: 59%)
-- Profit before tax and exceptional items up 11% to GBP25.7m (2012: GBP23.1m)
-- Profit before tax and exceptional items up 18% to GBP27.2m
excluding GBP1.5m Long Term Incentive Plan charge
-- Net funds of GBP45.2m (2012: GBP12.7m)
-- 6.0 million active customers(5) at 28 February 2013 (2012: 4.3 million)
Nick Robertson, CEO, commented:
"I am pleased to report another strong performance for ASOS for
the six months ended 28 February 2013, with retail sales up 34% to
GBP352.3m (2012: GBP262.9m) and profit before tax and exceptional
items up 11% to GBP25.7m (2012: GBP23.1m).
We have continued to invest in all aspects of the customer offer
to maximisethe growth opportunity; investing in product price and
quality, enhanced delivery options, a broad range of marketing
initiatives, focused local teams in international territories and
continual improvement to our technology platforms, most notably
mobile and international sites. Progress on our dedicated sites for
both Russia and China remains on track. We are already seeing the
benefits of this investment across all territories with increased
customer awareness, increased shopper frequency, higher conversion
rates, more items per basket and strong sales growth. At the same
time we have reached the milestone of six million active customers
worldwide.
Momentum is strong, and we remain positive in our outlook for
2012/13 as we continue our journey to becoming the number one
online fashion destination for twenty-somethings, globally. Our
International roll out continues and our GBP1 billion sales
ambition for the Group is firmly in our sights."
(5) Defined as having shopped in the last 12 months
Investor and Analyst Meeting
A meeting for investors and analysts will take place at 9.30am
today, 30 April 2013, at Etc. Venues, 200 Aldersgate, EC1A 4HD. A
webcast of the meeting will be available at
www.asosplc.com/investors.
For further information:
ASOS plc
Nick Robertson, Chief Executive Tel: 020 7756 1017
Nick Beighton, Finance Director
Greg Feehely, Head of Investor Relations
Website: www.asosplc.com
College Hill
Matthew Smallwood / Justine Warren / Jamie Ramsay Tel: 020 7457 2020
JPMorgan Cazenove
Luke Bordewich / Gina Gibson Tel: 020 7742 4000
Numis Securities
Alex Ham Tel: 020 7260 1000
Background note
ASOS is a global online fashion and beauty retailer selling over
60,000 branded and own-label products to fashion forward
twenty-somethings through our website, asos.com. We ship, for free,
to 241 countries and territories from our 1.1 million square foot
global distribution centre in the UK.
We tailor the mix of own label, global and local brands sold
through each of our seven local language websites: UK, USA, France,
Germany, Spain, Italy and Australia.
ASOS's websites attract 19.8 million unique visitors a month
(February 2012: 15.6 million), and as at 28 February 2013 had 11.1
million registered users (29 February 2012: 7.8 million) and 6.0
million active customers* (29 February 2012: 4.3 million) from 241
countries and territories.
*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 Company")
Global Online Fashion Destination
Interim Results for the six months ended 28 February 2013
Business Review
The Group has performed strongly in the period, with revenues up
33% to GBP359.7m (2012: GBP269.9m) and profit before tax and
exceptional items up 11% on the comparative period at GBP25.7m
(2012: GBP23.1m).
Our Fashion
Our product offer remains focused on our global twenty-something
customer and we have continued to invest in improving the value of
our own-brand offer. This "first price right price" approach
resulted in a higher mix of full price sales and a reduction in
markdown spend. We continually review our branded and own-label
ranges and add c2,000 new lines per week to ensure we lead fashion
trends and keep product ranges relevant for our customers, and to
drive engagement and frequency of traffic.
Although we have commenced rationalisation of our supplier base,
we are looking to put greater emphasis on this in future through
establishing a dedicated sourcing team. This will enable us to
drive retail gross margin efficiency and reduce lead times, whilst
not compromising on either fashionability or quality.
ASOS own-label continues to be highly sought after in both the
UK and internationally and accounted for 52.4% of total sales
during the period (2012: 52.5%). During the last six months we have
launched several exclusive designer collaborations including Markus
Lupfer for ASOS Black, Marios Schwab Lingerie, Antipodium Shoes,
Elliot Atkinson Nightwear and Puma for ASOS Black Menswear. We also
continued to support local communities in Kenya through our ASOS
Africa range.
Despite a highly competitive market our womenswear offer has
performed strongly during the period. Our efforts to add more
diversity into the range through an enhanced offer of separates and
casualwear has been well received by customers and has driven
strong growth. We have also expanded our range in our specialist
sizing areas; Petites, Curve and Maternity. These areas have
performed exceptionally well during the period and continue to gain
momentum. We will continue to review and expand the range of sizes
we offer in response to customer demand.
Menswear continued to grow strongly and accounted for 26% of
total sales (2012: 24%). Our own-label menswear offer is becoming
more established and is growing as a proportion of menswear
sales.
Third-party brands remain very important to ASOS and we have
continued to refine our third-party brand offer to ensure that it
remains relevant to our twenty-something customer. As we expand
globally, we are also introducing more brands with particular
relevance to our international territories. During the period we
have added new brands including New Look, Only, Boy London, House
Of Hackney, B+AB and White Chocolate to our brand portfolio.
Operations
Technology
We continue to enhance the engaging customer experience of our
websites, ensuring the ASOS platform permeates our customers'
fashion lives and positions ASOS as a global online community of
fashion lovers. A key part of this is creating technology that can
be accessed by customers across the globe 24/7 from whichever
device they chose. Mobile and tablets combined now account for
almost 30% of ASOS traffic and this continues to grow rapidly. To
ensure we are able to take full advantage of this, our enhanced
English-language mobile site was launched during April 2013 and we
will shortly be refreshing our iPad and iPhone apps and introducing
an Android app, whilst concurrently launching local language sites
in our strategic markets.
During the period, we added new functionality to our main site
including 'buy-the-look\', which allows customers to easily
purchase an entire outfit when viewing a particular product,
'recently-viewed' which provides for quick access to the most
recently viewed products, we improved our search results capability
and launched a trial of 'Live Style Advice' where our team of
stylists help our customers find items, deliver a more engaging
experience, and build brand engagement. In April 2013, we launched
a trial of our ASOS fit prediction tool. This increases engagement
and satisfaction by allowing our customers to upload the dimensions
of a garment they own or simply indicate a previously purchased
product and then compare it to a product onsite to ensure correct
fit. We have also significantly expanded our ability to continually
test small optimisations to our website that lead to incremental
improvements in conversion and sales.
We also continue to work on our underlying infrastructure
including enabling our platforms to handle all language character
sets and making structural changes to our checkout process to allow
us to add new payment methods and functionalities as we expand
globally. As part of this process, we added new payment methods for
our customers based in Germany and The Netherlands, and are already
seeing improved sales growth in these countries as a result.
Delivery and Returns
Delivery and returns solutions continue to be a cornerstone of
our engaging customer experience and profitable international
growth strategy. We have delivered further improvements to our UK
proposition over the last six months including extending the next
day delivery cut-off from 18:00 to 20:00, introducing an improved
text messaging service providing delivery information, and reducing
the price of our Premier service. We also continue to make
improvements to our global customer proposition.
Warehousing
The strong performance of the Barnsley warehouse continues with
an improvement in average labour cost per unit over the period of
12% compared to last year, despite making no significant changes to
the operating model during the past twelve months. Average labour
cost per unit during February 2013 was GBP0.58 (2012: GBP0.71).
During the period we obtained HMRC approval to operate a bonded
(customs) warehouse and this was launched successfully within the
Barnsley site at the end of January 2013. Customs warehousing will
provide ASOS with a cash flow benefit in the current financial year
and will also speed up receipt of our inbound stock. The programme
to optimise the Barnsley hub continues and we commenced the first
stage of our mechanisation plans, which will deliver an automated
despatch sorting process. Following the recent reductions in
average selling price per unit, approval has been gained to extend
our Barnsley site by 25% by 2014 which will provide capacity to
accommodate the required unit volumes to meet our GBP1bn sales
target by 2015 and beyond.
Global expansion
In-country teams now operate in our five key 'strategic' country
targets, being the UK, US, Australia, France and Germany, and we
are seeing strong growth in these territories as a result. Our next
focus is on 'tactical' countries, and we already have dedicated
websites in Italy and Spain and are now focussing on our expansion
into the People's Republic of China and the Russian Federation.
Expansion into the Chinese market is an integral part of our
strategy to be a truly global retailer. We have completed an
in-depth review of the Chinese market, including the customer base,
use of internet and social media, logistics and delivery options as
well as product sourcing and storage. As a result, the operating
model for ASOS China will differ from our other international
activities and will include a standalone technology platform, local
third-party distribution centre, local delivery solutions and
payment methods, and a larger multi-disciplinary in-country team.
This will give us the right platform to provide a proposition
tailored to our Chinese customers and to maximise the long-term
potential from this exciting market. Our third-party logistics and
customer care partners have now been chosen, a general manager has
been appointed and we are confident of a successful launch early in
the new financial year. The initial ASOS China website will contain
a relevant edit of c10% of our full product range, which will
expand as our Chinese business grows. We expect the net operating
cost of setting up our Chinese operation to be cGBP4-6m during each
of the years to 31 August 2014 and 31 August 2015, as we build the
business to create the platform for future sales growth. This will
be recognised within underlying operating profit. All capital
expenditure associated with our expansion into China is included in
guidance already given.
Developments to serve our Russian customers are on track and we
will launch next month. This will follow the same model as our
other tactical international operations, including a dedicated
Cyrillic website and focused marketing team, and with all
fulfilment taking place from our UK hub.
We also continue to build our market share in the strategic US
market and have an established in-country team focussed on driving
continued strong sales growth through targeted local marketing and
social media activities. We already have a local returns solution
to serve our US customers and continue to progress towards our
ambition to implement fulfilment from returns in the US.
People
The Chairman of the ASOS Audit Committee and Senior Independent
Director, Peter Williams, announced on 16 April 2013 that he will
be stepping down from the Board of ASOS Plc with effect from the
Company's Annual General Meeting on 4 December 2013. Peter has been
with the Company for nearly eight years, during which time he has
played an important role and we are very grateful to him for his
contribution. The search for Peter's successor is currently
underway.
On 24 April, ASOS's International Director, Jon Kamaluddin,
announced his intention to step down from the Board of ASOS Plc in
October 2013. We would like to thank Jon for his outstanding
contribution to the success of ASOS during his nine years with the
Company. The process of identifying a successor is currently
underway and Jon will effect a smooth handover before his
departure.
We have continued to strengthen our management capabilities to
ensure our senior team has the diversity of skills, experience, and
capabilities to deliver our growth ambitions. During the period we
were joined by our new Executive Director: Product and Trading, a
new Supply Chain Director, a new Chief Information Officer, and a
new Director of Finance: Reporting and Control. We also appointed
in-country managers in Germany and France, a new Head of Customer
Relationship Management and Insight, and a new Womenswear Design
Director.
To ensure we have the talent and capacity to continue to deliver
enhancements to our websites and progress towards our goal of
creating an online fashion community, we strengthened our
technology resource by opening a new development office in
Birmingham. This location provides access to a highly skilled
talent pool whilst driving operating leverage.
The Group's total headcount increased by 82 employees during the
last six months, principally in our Retail and Marketing
departments and also in our International offices. We have secured
a small team for our Russia office and have commenced recruitment
of a team in the People's Republic of China.
As announced today, to incentivise the senior management team to
deliver the planned growth of the Group, the Company is
implementing a new Long Term Incentive Plan which will be open to
Executive Directors and certain members of our senior management
team. The plan has a three-year performance period beginning on 1
September 2012 and ending on 31 August 2015 and is subject to
challenging earnings per share and total shareholder return
performance targets. These performance targets are aligned to the
business plans of the group and ensure that our growth is delivered
in a profitable way. The plan includes a 'target' performance
threshold which results in maximum vesting of 70% and equates to
fully-diluted earnings per share for the year to 31 August 2015 of
73.7p and our current sales goal of GBP1 billion. There is also a
'stretch' performance threshold which would result in 100% vesting
but which requires performance significantly beyond current goals,
with fully-diluted earnings per share of 91.1p and sales of GBP1.3
billion. A non-cash charge of GBP1.5m has been recognised during
the period in relation to this scheme. Further detail on the scheme
has been disclosed in a separate announcement today.
As well as introducing the Long Term Incentive Plan, further
grants were made to other members of our management team under our
existing Performance Share Plan and we implemented our new Share
Incentive Plan which offers every employee a number of free shares
in the company to share in the continuing success of ASOS.
Trading operations
The Group has achieved another strong performance during the six
months to 28 February 2013, with growth in customers, visits,
orders, sales and profit across all territories. International
sales growth continues to drive performance and now accounts for
61% of total retail sales compared to 59% in the comparative
period.
Revenue
Six months to 28 February 2013 International
-------- --------
Group
GBP'000s UK US EU RoW Total Total
------------------------------- -------- ------- ------- -------- -------- --------
Retail sales 137,579 35,551 77,457 101,676 214,684 352,263
Growth 26% 54% 36% 37% 39% 34%
Delivery receipts 2,477 663 920 1,330 2,913 5,390
Growth (36%) 47% 15% 66% 42% (9%)
Third party revenues 2,078 - - - - 2,078
Growth 95% (100%) (100%) (100%) (100%) 90%
------------------------------- -------- ------- ------- -------- -------- --------
Group revenues 142,134 36,214 78,377 103,006 217,597 359,731
Growth 25% 53% 36% 38% 39% 33%
------------------------------- -------- ------- ------- -------- -------- --------
Total Group revenue increased 33%, with total retail sales up
34%, driven by 39% growth in our International retail sales and 26%
growth in our UK retail sales.
The UK performed ahead of expectations during the period with
growth of 26%. This was driven by a particularly strong performance
during the peak December trading period and a positive response to
our investment in the pricing architecture of our own-brand ranges.
We remain at first place in the UK for unique visitors in the 15-34
age range (Comscore, February 2013).
Within our International markets, the US was the fastest growing
segment with retail sales up 54%, driven by investment in digital
marketing and social media and improvements to our service
proposition. Rest of World sales continue to perform strongly, up
37%, with continued strong performances from Australia (where we
have maintained our first place Comscore position) and Russia. Our
EU growth of 36% was driven by strong performances in the countries
where we have dedicated websites, particularly in France and
Germany where we introduced in-country teams during the period. In
the last six months we have moved to second place for 15-34 year
old unique visitors globally (Comscore February 2013), up from
fourth in August 2012.
Delivery receipts decreased 9% on the comparative period. This
is a planned result of our continued investment in our delivery
proposition, including trials in those countries where we have
dedicated websites to waive the express delivery fee above a
threshold basket value. In the UK, delivery receipts were down 36%
on the comparative period as we improved the speed of our standard
offer from six days in the prior year to four days this year,
reducing customers' need to pay for express delivery. We also
lowered the cost of the annual subscription to our 'ASOS Premier'
service.
Third party revenues, which mainly comprise advertising revenues
from the website and the ASOS magazine, increased by 90% on the
comparative period. This was due to increased integrated
advertising campaigns across multiple platforms.
Trading Key Performance Indicators
During February 2013, ASOS achieved 6.0m active customers(3) ,
growth of 41% over last year and a significant milestone as we aim
to be the number one fashion destination globally. 58% of these
customers are located in international territories which
demonstrates the success of our international expansion, although
there is still significant opportunity within the global
twenty-something market. The 6% decline in average basket value was
mainly driven by a 9% reduction in average selling price as a
direct consequence of the restructuring and investment in our
pricing architecture. Pleasingly, average units per basket showed
an overall increase compared to the comparative period of 3%,
reflecting quality, price and range improvements as well as new
functionality such as our 'buy-the-look' feature.
Six months to 28 February
2013 International
Group
KPIs UK US EU RoW Total Total
---------------------------- --------- --------- --------- --------- --------- ---------
Average basket value(1) GBP63.45 GBP57.72 GBP58.72 GBP56.46 GBP57.62 GBP60.30
Growth (4%) (4%) (8%) (9%) (8%) (6%)
Average units per basket 2.27 2.31 2.36 2.50 2.41 2.34
Growth 4% 5% 2% - 1% 3%
Average selling price
per unit(1) GBP27.98 GBP24.98 GBP24.87 GBP22.59 GBP23.93 GBP25.73
Growth (8%) (9%) (9%) (8%) (9%) (9%)
Number of orders ('000) 4,152 877 2,027 1,988 4,892 9,044
Growth 29% 68% 46% 50% 51% 40%
Unique visitors ('000)(2) 19,800
Growth 27%
Total visits ('000)(2) 16,705 7,295 16,995 14,598 38,888 55,593
Growth 20% 32% 39% 35% 36% 31%
Active customers ('000)(3) 2,537 746 1,549 1,175 3,470 6,007
Growth 18% 73% 57% 65% 63% 41%
---------------------------- --------- --------- --------- --------- --------- ---------
(1) Including VAT (2) During February
(3) As at 28 February, defined as having shopped with ASOS
during the last 12 months
Gross profit
The Group generated gross profit of GBP179.6m during the period
(2012: GBP137.2m), up 31% on the comparative period.
Six months to 28 February 2013 International
------------
GBP'000s UK US EU RoW Total Group Total
------------------------------- --------- --------- --------- ------- --------- ------------
Gross profit 65,874 20,630 37,980 55,120 113,730 179,604
Growth 22% 40% 33% 38% 37% 31%
Retail gross margin 44.6% 56.2% 47.8% 52.9% 51.6% 48.9%
Growth (30bps) (550bps) (120bps) - (120bps) (60bps)
Gross margin 46.3% 57.0% 48.5% 53.5% 52.3% 49.9%
Growth (100bps) (540bps) (120bps) 10bps (110bps) (90bps)
------------------------------- --------- --------- --------- ------- --------- ------------
During the six months, Group retail gross margin decreased by
60bps to 48.9% (2012: 49.5%). This is in line with expectations and
is the net result of significant investment in our own-brand
product price points offset by savings in clearance and promotional
markdown. This is most marked in the US as this segment buys the
highest proportion of own-brand products. In the Rest of World
segment, retail margin was unchanged despite this investment due to
improved markdown management as this segment has historically
consumed the highest proportion of markdown stock, as well as
benefits from the receipt of inward processing relief. Group gross
margin (including delivery revenues) also decreased by 90bps to
49.9% (2012: 50.8%).
ASOS maintains a strong focus on areas such as sourcing and
markdown management as well as continually augmenting our retail
disciplines, which includes the commencement of a rationalisation
of our supplier base to deliver gross margin efficiency that
subsequently can be reinvested in customer proposition and/or
pricing, as appropriate.
Investment in our operating resources
ASOS has maintained tight control of costs and has delivered
operating leverage and benefitted from economies of scale across
its fixed cost base, whilst at the same time investing in the
overall customer offer to continue to drive maximum growth
levels.
The Group increased its investment in its operating resources
and capability by 36% to GBP153.9m, excluding exceptional items
(2012: GBP113.4m), whilst benefitting from economies of scale.
Total operating costs ratio improved by 50bps excluding investment
in our customer delivery proposition.
H1 H1
GBP'000s 2012/13 2011/12 Change
----------------------------------------- -------------------- ---------- -------
Distribution costs (53,038) (36,548) 45%
Payroll and staff costs (30,164) (25,340) 19%
Warehousing* (20,631) (16,135) 28%
Marketing (20,455) (10,872) 88%
Production (2,128) (1,832) 16%
Technology costs (4,621) (3,685) 25%
Other operating costs* (16,377) (14,480) 13%
Depreciation and amortisation (6,522) (4,499) 45%
----------------------------------------- -------------------- ---------- -------
Operating costs excluding exceptional
items (153,936) (113,391) 36%
Operating costs excluding distribution
costs and exceptional items (100,898) (76,843) 31%
% of sales excluding distribution costs 28.0% 28.5% 50bps
----------------------------------------- -------------------- ---------- -------
*H1 2011/12 comparatives reclassified. Reclassified costs for
the 12 months to 31 August 2013 are Warehousing; GBP33,773,000 and
Other Operating Costs; GBP31,096,000.
Despite investing in resource to maximise sales growth in our
Retail and Marketing departments and in International offices,
payroll costs have improved by 100bps to 8.4% of revenue. We have
recognised a non-cash charge during the period of GBP1.5m in
relation to our new Long Term Incentive Plan.
The impressive performance of our warehouse has continued to
drive operating cost leverage, with a decline in average labour
cost per unit for the period of 12% on prior year, resulting in an
increase of only 28% in total warehouse costs compared to a 40%
increase in the number of orders.
We continually invest in our customer proposition and since last
year have reduced delivery times and improved distribution service
levels. Distribution costs have, as a result, increased by 45% on
the comparative period due to sales growth, faster delivery times
and an increased proportion of tracked parcels, all on the back of
increased customer demand.
We have invested in increased marketing activities during the
period, both in digital marketing and country-specific campaigns,
particularly in our strategic markets of the UK, France, Germany,
Australia and the US. This included targeted Christmas campaigns in
the UK and US, a multi-channel awareness campaign in Australia and
local magazine partnerships in France and Germany. The results of
these activities are already visible in the strong growth seen
during the period, and we expect continued returns on this
investment in each of our strategic markets over a twelve-month
period.
Depreciation has increased to 1.8% of revenue as a result of
increased investment in IT infrastructure during the last year.
Group Profit
The Group generated profit before tax and exceptional items up
11% on the comparative period at GBP25.7m (2012: GBP23.1m).
Excluding the non-cash Long Term Incentive Plan charge, profit
before tax and exceptional items increased by 18%.
H1 H1
GBP'000s 2012/13 2011/12 Change
----------------------------------------- -------------------- ---------- -------
Revenue 359,731 269,926 33%
Cost of sales (180,127) (132,736)
----------------------------------------- -------------------- ---------- -------
Gross profit 179,604 137,190 31%
Operating costs excluding exceptional
items (153,936) (113,391)
Operating profit before exceptional
items 25,668 23,799 8%
Finance income 87 -
Finance costs (61) (665)
----------------------------------------- -------------------- ---------- -------
Profit before tax and exceptional items 25,694 23,134 11%
Exceptional items - (1,508)
----------------------------------------- -------------------- ---------- -------
Profit before tax 25,694 21,626 19%
Income tax expense (6,324) (5,751)
----------------------------------------- -------------------- ---------- -------
Profit after tax 19,370 15,875 22%
----------------------------------------- -------------------- ---------- -------
Exceptional items
The transition to our new warehousing facilities was completed
by 31 March 2012 and all related property provisions were utilised
by 31 August 2012. There is therefore no exceptional cost or cash
outflow during the six month period to 28 February 2013.
Taxation
The effective tax rate before exceptional items for the Group
was 24.6%, 180bps lower than the prior year (2012: 26.4%).
Including exceptional items the effective tax rate was 24.6% (2012:
26.6%). 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 due to permanent disallowable items.
Earnings per share
Basic underlying earnings per share(1) increased by 6% to 23.7p
per share (2012: 22.3p), and diluted underlying earnings per
share(1) increased by 14% to 23.3p per share (2012: 20.5p).
Excluding the Long Term Incentive Plan charge, diluted underlying
earnings per share(1) increased by 20% to 24.7p per share.
Basic earnings per share(2) increased by 14% to 23.7p per share
(2012: 20.8p), and diluted earnings per share(2) increased by 22%
to 23.3p per share (2012: 19.1p).
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 drive further growth and to exploit opportunities both
in the UK and Internationally. Accordingly, it has decided not to
pay a dividend for the six months ended 28 February 2013. This
policy remains under regular review.
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.
Statement of Financial Position
The Group enjoys a robust financial position including a strong
cash balance and a clean stock position as we exit the winter
season. During the six month period, net assets increased by
GBP23.0m to GBP129.0m (31 August 2012: GBP106.0m), driven by profit
after tax for the period. The summary Statement of Financial
Position is shown below.
At 28 February At 31 August
GBP'000s 2013 2012
-------------------------------------- -------------------------- -------------
Goodwill and other intangible assets 27,559 23,236
Property, plant and equipment 27,416 27,293
Deferred tax asset 8,254 8,111
-------------------------------------- -------------------------- -------------
Non-current assets 63,229 58,640
-------------------------------------- -------------------------- -------------
Working capital 24,756 19,038
Net funds* 45,224 27,884
Current tax (liability)/asset (4,242) 425
-------------------------------------- -------------------------- -------------
Net assets 128,967 105,987
-------------------------------------- -------------------------- -------------
* Cash and cash equivalents less bank borrowings
Statement of Cash Flows
The Group generated cash of GBP17.3m during the period (2012:
GBP3.5m) and the closing cash balance was GBP45.2m at 28 February
2013, up from GBP27.9m at 31 August 2012. Net funds were GBP45.2m
(31 August 2012: GBP27.9m). The summary Statement of Cash Flows is
shown below.
H1 H1
GBP'000s 2012/13 2011/12
------------------------------------------------------------ -------------------- ---------
Operating profit 25,668 22,291
Exceptional items - 1,508
------------------------------------------------------------ -------------------- ---------
Operating profit before exceptional items 25,668 23,799
Depreciation and amortisation 6,522 4,499
Working capital (6,623) (7,363)
Share-based payments charges 1,779 420
Other non-cash items (60) -
Tax (paid)/received (17) 1,622
------------------------------------------------------------ -------------------- ---------
Cash inflow from operating profit before exceptional items 27,269 22,977
Operating cash outflow relating to exceptional items - (458)
------------------------------------------------------------ -------------------- ---------
Cash inflow from operating profit 27,269 22,519
Capital expenditure (10,051) (12,128)
Finance income 87 -
Proceeds from issue of ordinary shares 129 268
Net purchase of shares by employee benefit trust (22) (1,458)
Repayment of revolving credit facility - (5,000)
Finance expense (72) (666)
Total cash inflow 17,340 3,535
------------------------------------------------------------ -------------------- ---------
Cash generated from operating profit before exceptional items
increased by GBP4.3m, largely due to EBITDA improvements of
GBP3.9m. The cash outflow from working capital improved by GBP0.7m
due to improved stock management and a GBP2.0m duty and VAT benefit
as a result of gaining bonded warehouse status, partially offset by
timing of creditor payments. Capital expenditure was lower than in
the prior year due to the phasing of expenditure in the current
year, with capital expenditure weighted towards the second half of
the year, as well as timing of payments.
Our investments are funded by operating cash flows, with
additional short-term and medium-term facilities to support working
capital movements and planned capital expenditure. At 28 February
2013, the Group had in place an undrawn GBP20.0m revolving loan
credit facility which includes an ancillary GBP10.0m guaranteed
overdraft facility and which is available until July 2015.
Fixed asset additions
H1 H1
GBP'000 2012/13 2011/12
----------------------------- -------------------- ---------
IT 8,379 8,896
Office fixtures and fit-out 792 1,227
Warehouse 1,797 2,005
Total 10,968 12,128
----------------------------- -------------------- ---------
The majority of fixed asset additions were related to
improvements in our underlying IT infrastructure to support future
growth and ensure we provide a truly global offering to all our
customers. We have also commenced investment in mechanisation of
our warehouse despatch sorting process to drive future operating
cost efficiencies.
Outlook
We remain confident in our outlook for the remainder of the
financial year with our International operations continuing to
drive growth, and encouraging performance in our UK business.
Momentum is strong, our plans for expansion into Russia and China
are on track, and our GBP1 billion sales ambition for the Group is
firmly in sight.
Nick Robertson Nick Beighton
Chief Executive Officer Chief Financial Officer
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 28 February 2013
Six months Six months to 29 February Year to 31 August
to 2012 2012
28 February
2013
Total Before Exceptional Total Before Exceptional Total
exceptional items exceptional Items
items items
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 359,731 269,926 - 269,926 552,854 - 552,854
Cost of sales (180,127) (132,736) - (132,736) (269,997) - (269,997)
------------- ------------- ------------ ---------- ------------- ------------ ----------
Gross profit 179,604 137,190 - 137,190 282,857 - 282,857
Distribution
expenses (53,038) (36,548) - (36,548) (79,076) - (79,076)
Administrative
expenses (100,898) (76,843) (1,508) (78,351) (158,199) (4,463) (162,662)
------------- ------------- ------------ ---------- ------------- ------------ ----------
Operating profit 25,668 23,799 (1,508) 22,291 45,582 (4,463) 41,119
Finance Income 87 - - - - - -
Finance expense (61) (665) - (665) (1,109) - (1,109)
------------- ------------- ------------ ---------- ------------- ------------ ----------
Profit before
tax 25,694 23,134 (1,508) 21,626 44,473 (4,463) 40,010
Income tax
(expense)/credit (6,324) (6,107) 356 (5,751) (11,576) 1,103 (10,473)
Profit for the
period 19,370 17,027 (1,152) 15,875 32,897 (3,360) 29,537
============= ============= ============ ========== ============= ============ ==========
Net exchange (38) - - - - - -
adjustments
offset in reserves
------------- ------------- ------------ ---------- ------------- ------------ ----------
Other comprehensive (38) - - - - - -
income for the
period
============= ============= ============ ========== ============= ============ ==========
Total comprehensive
income attributable
to owners of the
parent 19,332 17,027 (1,152) 15,875 32,897 (3,360) 29,537
============= ============= ============ ========== ============= ============ ==========
Earnings per
share(1)
Basic 23.7 20.8 38.1
Diluted 23.3 19.1 35.6
----- ----- ----- ----- -----
Underlying earnings
per share(2)
Basic 23.7 22.3 42.5
Diluted 23.3 20.5 39.6
----- ----- ----- ----- -----
1 Earnings per share is calculated in accordance with IAS 33
'Earnings per share' and includes exceptional items
2 Underlying earnings per share excludes exceptional items
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 28 February 2013
Employee
Called up Benefit
share Share Hedging Retained Trust Translation Total
capital premium Reserve earnings(1) reserve Reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
September 2011 2,672 5,634 192 67,769 (2,389) - 73,878
Shares allotted in
the period 33 235 - - - - 268
Net purchase of
shares by
Employee Benefit
Trust - - - - (1,458) - (1,458)
Transfer of shares
from Employee
Benefit Trust on
exercise - - - (99) 99 - -
Share based payments
charge - - - 420 - - 420
Derivative
Financial
Instruments - - (192) - - - (192)
Profit for the year
and total
comprehensive
income - - - 15,875 - - 15,875
Deferred tax on
share options - - - (5,533) - - (5,533)
Current tax on items
taken directly
to equity - - - 5,720 - - 5,720
Balance as at 29
February 2012 2,705 5,869 - 84,152 (3,748) - 88,978
============ ============= ============= ============ ============ ============= ========
Shares allotted in
the period 149 236 - - - - 385
Cash received on
exercise of shares
from Employee
Benefit Trust - - - - 121 - 121
Transfer of shares
from Employee
Benefit Trust on
exercise - - - (1,163) 1,163 - -
Share based payments
charge - - - 533 - - 533
Profit for the year
and total
comprehensive
income - - - 13,662 - - 13,662
Deferred tax on
share options - - - (2,514) - - (2,514)
Current tax on items
taken directly
to equity - - - 4,822 - - 4,822
Balance as at 31
August 2012 2,854 6,105 - 99,492 (2,464) - 105,987
============ ============= ============= ============ ============ ============= ========
Shares allotted in
the period 29 99 - - - - 128
Purchase of shares
by Employee Benefit
Trust - - - - (22) - (22)
Transfer of shares
from Employee Benefit
Trust on exercise - - - (123) 123 - -
Share based payments
charge - - - 1,779 - - 1,779
Profit for the period - - - 19,370 - - 19,370
Deferred tax on share
options - - - (257) - - (257)
Current tax on items
taken directly to
equity - - - 2,020 - - 2,020
Currency translation
differences for overseas
operations - - - - - (38) (38)
Balance as at 28 February
2013 2,883 6,204 - 122,281 (2,363) (38) 128,967
====== ====== ======== ======== ===== ========
(1) Retained earnings includes the share-based payments
reserve
Unaudited Consolidated Statement of Financial Position
As at 28 February 2013
As at As at As at
28 February 29 February 31 August
2013 2012 2012
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 1,060 1,060 1,060
Other intangible assets 26,499 19,378 22,176
Property, plant and equipment 27,416 26,889 27,293
Deferred tax asset 8,254 10,813 8,111
------------- ------------- -----------
63,229 58,140 58,640
------------- ------------- -----------
Current assets
Inventories 99,861 78,420 100,263
Trade and other receivables 15,091 17,577 19,066
Current tax asset - 2,051 425
Cash and cash equivalents 45,224 17,718 27,884
Assets held for sale - 2,800 -
------------- ------------- -----------
160,176 118,566 147,638
------------- ------------- -----------
Current liabilities
Trade and other payables (90,196) (81,646) (100,291)
Current tax liability (4,242) - -
Revolving credit facility - (5,000) -
Provisions - (1,082) -
(94,438) (87,728) (100,291)
------------- ------------- -----------
Net current assets 65,738 30,838 47,347
Net assets 128,967 88,978 105,987
============= ============= ===========
Equity attributable to owners of the
parent
Called up share capital 2,883 2,705 2,854
Share premium 6,204 5,869 6,105
Employee Benefit Trust reserve (2,363) (3,748) (2,464)
Translation Reserve (38) - -
Retained earnings 122,281 84,152 99,492
Total equity 128,967 88,978 105,987
============= ============= ===========
Unaudited Consolidated Statement of Cash Flows
For the six months ended 28 February 2013
Six months Six months Year to
to to 31 August
28 February 29 February 2012
2013 2012
GBP'000 GBP'000 GBP'000
Operating profit 25,668 22,291 41,119
Adjusted for:
Operating exceptional items - 1,508 4,463
Depreciation of property, plant and
equipment 3,205 2,852 5,743
Amortisation of other intangible
assets 3,317 1,647 4,481
Decrease/(increase) in inventories 402 (11,859) (33,702)
Decrease/(increase) in trade and
other receivables 3,975 (2,586) (4,075)
(Decrease)/increase in trade and other
payables (11,000) 7,082 27,901
Share-based payments charges 1,779 420 953
Other non-cash items (60) - -
Income taxes (paid)/received (17) 1,622 1,883
------------- ------------- -----------
Net cash generated from operating
activities before exceptional items 27,269 22,977 48,766
Cash outflow relating to exceptional
operating items - (458) (1,695)
------------- ------------- -----------
Net cash generated from operating
activities 27,269 22,519 47,071
Investing activities
Payments to acquire other intangible
assets (7,718) (8,599) (14,500)
Payments to acquire property, plant
and equipment (2,333) (3,529) (7,154)
Finance income 87 - -
Net cash outflow from investing activities (9,964) (12,128) (21,654)
Financing activities
Proceeds from issue of ordinary shares 129 268 463
Net purchase of shares by Employee
Benefit Trust (22) (1,458) (1,337)
Repayment of revolving credit facility - (5,000) (10,000)
Finance expense (72) (666) (842)
------------- ------------- -----------
Net cash generated/(used) in financing
activities 35 (6,856) (11,716)
Net increase in cash and cash equivalents 17,340 3,535 13,701
============= ============= ===========
Opening cash and cash equivalents 27,884 14,183 14,183
Closing cash and cash equivalents 45,224 17,718 27,884
============= ============= ===========
Reconciliation of net cash flow to movement in net funds
Six months Six months Year to
to to 31 August
28 February 29 February 2012
2013 2012
GBP'000 GBP'000 GBP'000
Net funds at beginning of the period 27,884 4,183 4,183
Increase in cash and cash equivalents 17,340 3,535 13,701
Decrease in revolving credit facility
liability - 5,000 10,000
------------- ------------- -----------
Net funds at end of the period 45,224 12,718 27,884
============= ============= ===========
Notes to the Unaudited Interim Financial Information
For the six months ended 28 February 2013
1. Basis of preparation, accounting policies and approval of Interim Statement
a) Basis of preparation
The Interim Financial Statements for the six months ended 28
February 2013 have been prepared in accordance with IAS 34,
"Interim Financial Reporting" as adopted by the European Union. The
condensed consolidated interim financial information should be read
in conjunction with the Group's Annual Report and Accounts for the
five months ended 31 August 2012, which have been prepared in
accordance with IFRSs as adopted by the European Union.
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. The principal risks and uncertainties facing the Group
for the six months ended 28 February 2013 remain unchanged from
those set out in the Annual Report and Accounts for the five months
ended 31 August 2012 and are applicable to the remainder of the
financial year to 31 August 2013. The Annual Report and Accounts
for the five months ended 31 August 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.
b) Financial information
The financial information set out in this report does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The Annual Report and Accounts for the five
months ended 31 August 2012 has been filed with the Registrar of
Companies. 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 Interim Financial Statements are unaudited and were approved
by the Board of Directors on 29 April 2013.
c) Accounting policies
The Financial Statements have been prepared in accordance with
the accounting policies set out in the Annual Report and Accounts
for the five months to 31 August 2012.
d) 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.
Six Months to 28 February 2013
UK USA EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Retail sales 137,579 35,551 77,457 101,676 352,263
Delivery receipts 2,477 663 920 1,330 5,390
Third party revenues 2,078 - - - 2,078
------------- ------------- ------------ ------------ ----------
Total revenue 142,134 36,214 78,377 103,006 359,731
Cost of sales (76,260) (15,584) (40,397) (47,886) (180,127)
------------- ------------- ------------ ------------ ----------
Gross profit 65,874 20,630 37,980 55,120 179,604
Distribution costs (12,282) (12,561) (10,889) (17,306) (53,038)
------------- ------------- ------------ ------------ ----------
Segment result 53,592 8,069 27,091 37,814 126,566
Administrative expenses (100,898)
----------
Operating profit 25,668
Finance income 87
Finance expense (61)
----------
Profit before tax 25,694
==========
Six Months to 29 February 2012
UK USA EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Retail sales 108,967 23,137 56,846 73,971 262,921
Delivery receipts 3,861 451 797 803 5,912
Third party revenues 1,066 5 10 12 1,093
------------- ------------- ------------ ------------ ----------
Total revenue 113,894 23,593 57,653 74,786 269,926
Cost of sales (60,012) (8,866) (29,013) (34,845) (132,736)
------------- ------------- ------------ ------------ ----------
Gross profit 53,882 14,727 28,640 39,941 137,190
Distribution costs before
exceptional items (10,135) (5,673) (10,058) (10,682) (36,548)
------------- ------------- ------------ ------------ ----------
Segment result before
exceptional items 43,747 9,054 18,582 29,259 100,642
Administrative expenses
before exceptional items (76,843)
----------
Operating profit before
exceptional items 23,799
Exceptional items (1,508)
Finance expense (665)
----------
Profit before tax 21,626
==========
2. Segmental analysis (continued)
Year to 31 August 2012
UK USA EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Retail sales 205,258 49,585 117,748 165,296 537,887
Delivery receipts 7,119 1,047 1,610 1,832 11,608
Third party revenues 3,288 13 29 29 3,359
---------- --------- --------- --------- ----------
Total revenue 215,665 50,645 119,387 167,157 552,854
Cost of sales (113,042) (19,960) (59,926) (77,069) (269,997)
---------- --------- --------- --------- ----------
Gross profit 102,623 30,685 59,461 90,088 282,857
Distribution costs (19,531) (14,729) (18,666) (26,150) (79,076)
---------- --------- --------- --------- ----------
Segment result 83,092 15,956 40,795 63,938 203,781
Administrative expenses
before exceptional items (158,199)
----------
Operating profit before
exceptional items 45,582
Exceptional items (4,463)
Finance expense (1,109)
----------
Profit before tax 40,010
==========
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 six months to 28 February 2013, exceptional costs of
GBPnil were charged to operating expenses. In the prior period
exceptional costs of GBP1,508,000 were charged to operating
expenses to reflect the direct costs of the completion of the
reorganisation of distribution following the leasing of a new
distribution centre to meet the increasing capacity needs of the
business. The reorganisation was completed by 31 March 2012.
The main components of the exceptional charge are as
follows:
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012 GBP'000
GBP'000 GBP'000
Dual site decollation costs - 228 228
Vacant property costs - 1,280 1,435
Impairment of assets - - 2,800
-------------- ------------- -----------
Total - 1,508 4,463
============== ============= ===========
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 period. 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
period, adjusted for the effects of potentially dilutive share
options.
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012
No. of shares No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for
basic earnings per share 81,567,423 76,378,208 77,488,212
Effect of dilutive options 1,537,270 6,663,914 5,551,275
-------------- -------------- --------------
Weighted average shares in issue for
diluted earnings per share 83,104,693 83,042,122 83,039,487
============== ============== ==============
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012
GBP'000 GBP'000 GBP'000
Earnings
Underlying earnings attributable to
shareholders 19,370 17,027 32,897
Exceptional items net of related taxation - (1,152) (3,360)
---------------- ---------------- ----------------
Earnings attributable to shareholders 19,370 15,875 29,537
================ ================ ================
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012
pence pence pence
Basic earnings per share
Underlying earnings per share(1) 23.7 22.3 42.5
Exceptional items net of taxation - (1.5) (4.4)
---------------- ---------------- ----------------
Earnings per share(2) 23.7 20.8 38.1
================ ================ ================
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012
pence pence pence
Diluted earnings per share
Underlying earnings per share(1) 23.3 20.5 39.6
Exceptional items net of taxation - (1.4) (4.0)
---------------- ---------------- ----------------
Earnings per share(2) 23.3 19.1 35.6
================ ================ ================
4,000,822 shares issued on 31 May 2012 under the Management
Incentive Plan are included within weighted average shares in issue
for basic earnings per share. These shares were included within
weighted average shares in issue for diluted earnings per share at
29 February 2012. At 31 August 2012, 2,405,723 of these shares were
included in weighted average shares in issue for basic earnings per
share and the remainder were included in weighted average shares in
issue for diluted earnings per share.
(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.
5. Reconciliation of net funds
6 months 6 months Year to
to to 31 August
28 February 29 February 2012
2013 2012 GBP'000
GBP'000 GBP'000
Net movement in cash and
cash equivalents 17,340 3,535 13,701
Repayment of revolving credit
facility - 5,000 10,000
------------- ------------- -----------
Net movement in net funds 17,340 8,535 23,701
Opening net funds 27,884 4,183 4,183
------------- ------------- -----------
Closing net funds 45,224 12,718 27,884
============= ============= ===========
Closing net funds comprises:
Cash and cash equivalents 45,224 17,718 27,884
Drawings under revolving
credit facility - (5,000) -
------------- ------------- -----------
Net funds 45,224 12,718 27,884
============= ============= ===========
The Group has a GBP20.0m revolving loan credit facility which
includes an ancillary GBP10.0m guaranteed overdraft facility and
which is available until July 2015.
6. Related parties
The Group's related parties are its joint venture, Employee
Benefit Trust and key management personnel. There have been no
material changes to the related party transactions during the
interim period under review.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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