TIDMASC
RNS Number : 1411R
ASOS PLC
23 October 2013
23 October 2013
ASOS plc
Global Online Fashion Destination
Final Results for the year ended 31 August 2013
Summary results table
GBP'000s Year to Year to Change
31 August 31 August
2013 2012
(Audited) (Unaudited)
------------------------------- ---------------------- ------------- -------
Group revenues(1) 769,396 552,854 39%
Retail sales 753,807 537,887 40%
UK retail sales 276,027 205,258 34%
International retail
sales 477,780 332,629 44%
Gross profit 398,580 282,857 41%
Retail gross margin 50.8% 49.8% 100bps
Gross margin 51.8% 51.2% 60bps
Profit before tax and
exceptional items 54,670 44,473 23%
Profit before tax 54,670 40,010 37%
Diluted underlying earnings
per share(2) 49.2p 39.6p 24%
Diluted earnings per share(3) 49.2p 35.6p 38%
Net funds(4) 71,139 27,884 155%
------------------------------- ---------------------- ------------- -------
(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 and exceptional items of GBPnil (2012: GBP4.5m)
(4) Cash and cash equivalents less bank borrowings
Highlights:
-- Retail sales up 40% (UK retail sales up 34%, International retail sales up 44%)
-- Retail gross margin up by 100bps and gross margin up by 60bps
-- International retail sales accounted for 63% of total retail sales (2012: 62%)
-- Profit before tax and exceptional items up 23% to GBP54.7m
-- Net funds of GBP71.1m (2012: GBP27.9m)
-- 7.1 million active customers(5) at 31 August 2013 (2012: 5.0 million)
-- Step-change in capex investment to c.GBP55m in each of the next two years
Nick Robertson, CEO, commented:
"I am pleased to report another strong performance for ASOS for
the year ended 31 August 2013, with retail sales up 40% to GBP754m
and profit before tax and exceptional items up 23% to GBP54.7m.
During the year we continued to make progress towards our goal
of being the world's number one fashion destination for
20-somethings. We reached the milestone of 7 million active
customers worldwide, following significant investment in our
product offer, delivery options, customer experience and marketing.
We also successfully launched our dedicated website in Russia
during May 2013 and will soon launch our China operation.
We have started the new financial year positively. Our GBP1
billion sales target is now firmly in our sights and we have
stepped up our investment in people, technology, logistics and
marketing to support the significant global potential of the ASOS
business."
(5) Defined as having shopped in the last 12 months
Investor and Analyst Meeting
There will be a meeting for analysts that will take place at
9.30am today, 23 October 2013, at Greater London House, Hampstead
Road, London, NW1 7FB. A webcast of the meeting will be available
both live and following the meeting at www.asosplc.com. Please
register your attendance in advance with College Hill using the
details below.
For further information:
ASOS plc
Nick Robertson, Chief Executive Officer Tel: 020 7756 1000
Nick Beighton, Chief Financial Officer
Greg Feehely, Head of Investor Relations
Website: www.asosplc.com/investors
College Hill
Matthew Smallwood / Justine Warren / Jamie Tel: 020 7457 2020
Ramsay
JPMorgan Cazenove
Luke Bordewich / Gina Gibson Tel: 020 7742 4000
Numis Securities
Alex Ham Tel: 020 7260 1000
Background note
ASOS is a global fashion destination for 20-somethings. We sell
cutting-edge 'fast fashion' and offer a wide variety of
fashion-related content, making ASOS.com the hub of a thriving
fashion community. We sell over 65,000 branded and own-brand
products through localised mobile and web experiences, delivering
from our UK hub to almost every country in the world.
We tailor the mix of own-label, global and local brands sold
through each of our eight local language websites: UK, US, France,
Germany, Spain, Italy, Australia, Russia and, soon to launch,
China.
ASOS's websites attract 21.3 million unique visitors a month (31
August 2012: 18.8million) and as at 31 August 2013 had 13.2 million
registered users (31 August 2012: 9.2 million) and 7.1 million
active customers* (31 August 2012: 5.0 million).
*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
www.asos.com/ru
www.asos.com/cn
m.asos.com
marketplace.asos.com
fashionfinder.asos.com
ASOS plc ("the Company")
Global Online Fashion Destination
Final Results for the year ended 31 August 2013
Business Review
The Group has performed strongly in the year, with revenues up
39% to GBP769.4m (2012: GBP552.9m) and profit before tax and
exceptional items up 23% to GBP54.7m (2012: GBP44.5m) as we
invested in future growth, particularly in our people, technology,
logistics and marketing.
Our fashion
Our product offer remains focused on our global,
fashion-conscious 20-something customers and we constantly review
both our own-label and branded ranges to ensure we lead fashion
trends, are globally relevant, and offer appropriate price points.
The global relevance of our product range is increasingly important
and we have introduced specific 'counter seasonal' ranges as well
as adding more locally relevant brands.
Our ongoing investment in even better value for our customers
has been well received and resulted in a higher mix of full-price
sales and a lower level of discounting, particularly during our
Spring/Summer 2013 campaign. We were joined by our new Sourcing
Director in August 2013 and during the new financial year will
focus on rationalisation of our supplier base to drive further
retail gross margin efficiency and reduce lead times, whilst
enhancing fashionability and quality.
Womenswear and Menswear have both performed strongly during the
period. We continued to diversify our Womenswear offer through
enhancements to our casual and separates ranges and an increased
breadth of product in our specialist Petite, Maternity and Curve
ranges in response to consumer demand. We also extended our size
range across all product categories to increase relevance in our
international markets, particularly in the US and Asia.
We strengthened our own-brand range in both Womenswear and
Menswear and this accounted for 52.3% of sales over the year (2012:
51.5%). We added new product categories including men's underwear
and women's 'Reclaimed Vintage' and also launched several exclusive
designer collaborations including Markus Lupfer for ASOS Black,
Marios Schwab Lingerie, Antipodium Shoes, Elliot Atkinson
Nightwear, Sophia Kokosolaki and Puma for ASOS Black Menswear.
Third-party brands remain a key part of our business; our
portfolio includes c.800 brands and we continually review the
relevance of our branded offer. During the year we added new brands
including New Look, Monki, Only, Boy London, Stussy and The Kooples
and, following the year end, Jack Wills and Pull & Bear.
Operations
Technology
We constantly enhance our websites to ensure we offer the most
engaging customer experience, with particular focus on developing
and improving our mobile sites and apps as these represent an
ever-increasing proportion of our traffic and sales. Our goal is to
offer our international customers the same mobile and tablet access
we offer our UK customers and we launched dedicated mobile sites in
all markets where we already have local language websites during
July 2013. In the UK we upgraded our mobile site in April 2013 and
released our upgraded iOS apps and a new android app during October
2013. We will be launching US versions of our android and iOS apps
during the first half of the new financial year, and our next focus
will be on developing mobile apps to serve our other strategic
markets.
Customer Experience
We added new functionality including 'Buy-the-Look', 'Recently
Viewed' and larger product image sizes. We also launched our new
women's and men's homepages featuring engaging live dynamic content
including our daily feature, 'This Just Happened', which gives our
customers a continuous stream of the latest fashion news.
We continued to make structural changes to our checkout process
to support our global expansion, and as part of this process
introduced additional payment methods to serve our customers in
Germany and the Netherlands, which are already driving increased
sales in these territories.
We have also seen a significant uplift in subscribers to our
annual Premier membership scheme, supported by a price reduction in
the UK and launch in the US, Australia and Germany. This entitles
members to unlimited free express delivery, special offers, a
monthly magazine, previews and priority access during sale
periods.
Delivery and returns
We improved our delivery and returns experience through
enhancements to our carrier network. In the UK we extended our next
day delivery cut-off to 9pm and introduced a 15-minute delivery
slot on these orders. Internationally we introduced a new express
service for our Russian customers and reduced our express delivery
lead-time by one day in 17 countries and our standard delivery
lead-time by one day in the US, France and Germany. This was
achieved alongside improved order tracking in the US and France,
where 100% of our standard-delivery parcels are now tracked.
Finally, we reduced our returns processing lead-time by four days
for our customers in France and Germany and have seen a reduction
in customer contact regarding returns in these territories as a
result. We introduced a next day delivery option for our French
customers early in the new financial year.
Warehousing
Our Barnsley fulfilment centre has shown further improvement in
the year with labour cost per unit (LCPU) down 11% to 63p per unit
(2012: 71p). Although subject to change as we build out our
warehousing capability, our medium-term goal is to deliver an LCPU
of 50p, and we progressed towards that target with the transition
to a new service provider in August 2013 and the launch of our
mechanised despatch sorter in October 2013. We also gained bonded
warehouse status in January 2013 and commenced building work on
extending the 530,000 sq. ft. site by 140,000 sq. ft., which will
provide the storage capacity for the required unit volumes to
exceed our GBP1bn sales target.
We expect to launch our mechanised picking solution during the
financial year ended 2015 and continue to review our medium-term
warehousing requirements to ensure we have the capacity to meet our
growth ambitions, including planned capital investment of
GBP25m-GBP30m on our Barnsley hub during the year to 31 August
2014.
Our international logistics strategy has continued to evolve. We
relocated our Australian returns centre in March 2013, to reduce
costs and provide capacity for future volume growth. During May
2013 we completed the transition from our existing US returns
processing centre in Atlanta to a new and more advanced operation
in Ohio. We are now fulfilling from returns in the US, and the new
facility is the foundation for a full US logistics operation in the
future. Finally, we established a logistics partnership in China
and will shortly commence domestic distribution to our Chinese
customers.
Global expansion
We deliver to 237 countries and territories and continue to
improve our international proposition, particularly in our
strategic country markets where we have dedicated websites and
in-country teams, and offer locally-relevant products, payment
methods, currencies and delivery options.
In May 2013, we launched our dedicated Russian website, and have
seen subsequent strong growth in this territory. We now have a team
of Russian nationals based in our London headquarters to support
this market and offer a proposition which is tailored to our
Russian customers including local language customer care, dedicated
marketing and social media activities and a dedicated express
delivery solution.
Our operation in the People's Republic of China is now in final
testing phase and will be launched imminently. We have a dedicated
Chinese-language desktop and mobile site initially offering around
2,000 locally-relevant own-brand styles, an in-country
multi-disciplinary team, dedicated delivery solutions and payment
methods, local language customer care and a domestic distribution
partner. Initial testing shows that these elements are all
functioning effectively and will provide the foundations to
maximise the long-term potential of the Chinese market.
Our international focus during the next six months will be in
further establishing and growing our Chinese operation and
continuing to grow our proposition and market share in our key
strategic country targets of the UK, US, France, Germany, Australia
and Russia.
People
We have further enhanced the strength and depth of our
management team with the arrivals of our new Supply Chain Director,
Chief Information Officer, Director of Finance, Performance
Marketing Director, Sourcing Director and our in-country management
teams. These appointments ensure our senior team has the diversity
of skills, experience, and capabilities to deliver our future
growth ambitions.
The Group's total headcount increased by 318 employees during
the year to 1,352, principally in our Womenswear, Merchandising,
Marketing, Technology and Customer Care departments as well in our
in-country teams, including 17 employees who form our
multi-disciplinary ASOS China team.
During August 2013, ASOS appointed Ian Dyson as Senior
Independent Non-Executive Director, replacing Peter Williams. Peter
will step down from the Board with effect from the Company's Annual
General Meeting on 4 December 2013 and we are very grateful for his
contribution to ASOS over the last nine years. Ian previously held
both executive and non-executive directorships at FTSE100 and
FTSE250 consumer businesses including, most recently, Marks &
Spencer and Punch Taverns, and brings a wealth of experience and
knowledge of both the retail industry and of technology. Ian's
appointment took effect on 1 October 2013.
On 16 July, Kate Bostock, Executive Director Product and
Trading, resigned from the company and stepped down from the Board
with immediate effect. Maria Hollins has since been promoted to the
role of Retail Director and we have further strengthened her retail
management team.
As previously announced, Jon Kamaluddin stepped down from the
Board in October 2013. Shaun McCabe joined the Executive Board of
ASOS in September 2013 in the role of International Director,
following six years in the role of Vice President: Finance at
Amazon Sarl EU.
Trading operations
The Group has achieved another strong performance during the
year ended 31 August 2013, with growth in sales and profits across
all territories.
Revenue
Year to 31 August 2013 International
(Unaudited)
GBP'000s UK US EU RoW Total Group total
---------------------- -------- ------- -------- -------- -------- ------------
Retail sales 276,027 77,678 177,708 222,394 477,780 753,807
Growth 34% 57% 51% 35% 44% 40%
Delivery receipts 5,314 1,456 2,212 3,028 6,696 12,010
Growth (25%) 39% 37% 65% 49% 3%
Third party revenues 3,579 - - - - 3,579
Growth 7% - - - - 7%
Group revenues 284,920 79,134 179,920 225,422 484,476 769,396
Growth 32% 56% 51% 35% 44% 39%
---------------------- -------- ------- -------- -------- -------- ------------
Total Group revenue increased 39%, with total retail sales up
40% on the prior year, driven by strong growth in both the UK (34%)
and in our international territories (44%). International retail
sales now account for 63% of total retail sales compared to 62%
last year.
The UK's performance was ahead of expectations, driven by a
particularly positive response to our Spring/Summer 2013
proposition, following a strong peak Christmas trading period. We
retained our first place position in the UK for unique visitors to
apparel retailers in the 15-34 age range (Comscore, August
2013).
Our strongest growth was in our strategically important
international markets. The US was the fastest growing segment with
retail sales growth of 57%, following the establishment of our US
in-country team early in the financial year and subsequent targeted
investment in digital marketing and social media and improvements
to our service proposition.
Our EU retail sales growth of 51% was driven by strong
performances in the countries where we have dedicated websites
(France, Germany, Italy and Spain), and was further enhanced by the
establishment of our in-country teams in France and Germany at the
start of the year as well as the introduction of new payment
methods tailored to our customers in Germany and the
Netherlands.
Retail sales in our Rest of World segment grew by 35%. This
segment continues to be dominated by Australia, where growth slowed
due to macro-economic factors and our improved stock management, as
Australia has historically consumed a high proportion of markdown
product. Despite this, we have comfortably maintained our first
place Comscore ranking in this territory. Russia is a growing
portion of this segment, with strong performance following the
launch of our dedicated Russian website in May 2013.
Despite retail sales growth of 40%, delivery receipts increased
by only 3% since last year as an increasing percentage of our
customers enjoy the benefits of our improved free shipping offers,
particularly in the UK where we improved our free standard delivery
offer from six days to four days and reduced the annual
subscription charge for our ASOS Premier service.
Third party revenues, which mainly comprise advertising revenues
from the website and the ASOS magazine, increased by 7% as we
continued to grow revenues from our existing platforms.
Trading key performance indicators
ASOS's journey to becoming the world's no. 1 fashion destination
continued as we surpassed 7m active customers(1) for the first
time, with 7.1m customers across the globe having shopped with us
during the financial year. This represents a significant increase
of 42% over last year. We also surpassed 4m international active
customers for the first time, another key milestone in our
international expansion.
The 1% decline in average basket value was driven by a 6%
reduction in average selling price following the restructuring and
investment in our pricing architecture during the first half of the
year, which was largely offset by a 5% increase in average units
per basket. This reflects our quality, price and range
improvements, new functionality such as our 'buy-the-look' feature,
and well-received free international express delivery offers above
a minimum spend threshold.
Year to 31 August 2013 International
(Unaudited)
Group
KPIs UK US EU RoW Total total
---------------------------- --------- --------- --------- --------- --------- ---------
Average basket value(2) GBP63.69 GBP59.13 GBP59.88 GBP57.80 GBP58.93 GBP61.03
Growth (1%) 3% (2%) (2%) (1%) (1%)
Average units per basket 2.41 2.47 2.52 2.55 2.52 2.47
Growth 5% 9% 5% 3% 5% 5%
Average selling price
per unit(2) GBP26.46 GBP23.95 GBP23.74 GBP22.69 GBP23.36 GBP24.69
Growth (6%) (5%) (7%) (5%) (6%) (6%)
Number of orders ('000) 8,536 1,917 4,652 4,267 10,836 19,372
Growth 36% 58% 56% 39% 49% 43%
Total visits ('000)(3,4) 20,745 9,015 18,849 19,263 47,127 67,872
Growth 47% 53% 52% 35% 45% 46%
Active customers ('000)(1) 2,814 897 1,960 1,407 4,264 7,078
Growth 25% 57% 61% 48% 56% 42%
---------------------------- --------- --------- --------- --------- --------- ---------
(1) As at 31 August, defined as having shopped with ASOS during
the last 12 months
(2) Including VAT (3) During August
(4) Total visits previously included only website visits; now
includes website and mobile site visits. Prior year comparatives
have been restated.
Gross profit
The Group generated gross profit of GBP398.6m during the year
(2012: GBP282.9m), up 41% on last year.
International
--------------------- -------- --------
Year to 31 August
2013 (Unaudited) Group
GBP'000s UK US EU RoW Total total
--------------------- -------- --------- ------- -------- -------- --------
Gross profit 136,235 46,447 91,055 124,843 262,345 398,580
Growth 33% 51% 53% 39% 46% 41%
Retail gross margin 46.1% 57.9% 50.0% 54.8% 53.5% 50.8%
Change 120bps (180bps) 90bps 140bps 70bps 100bps
Gross margin 47.8% 58.7% 50.6% 55.4% 54.2% 51.8%
Change 20bps (190bps) 80bps 150bps 70bps 60bps
--------------------- -------- --------- ------- -------- -------- --------
During the year, retail gross margin increased by 100bps to
50.8% (2012: 49.8%), largely as a result of improved stock
management which delivered substantial markdown improvements
particularly during our Spring/Summer 2013 campaign. These impacts
were partially offset during the first half of the year by
significant investments in our own-brand product price points,
which was most marked in the US as this segment traditionally
consumes the highest proportion of own-brand products. Gross margin
(including delivery revenues) increased by 60bps to 51.8% (2012:
51.2%).
Investment in our operating resources
The Group increased its investment in its operating resources
and capability ahead of future sales growth, particularly in the
areas of marketing, people and distribution costs. Overall,
operating expenses increased by 45% to GBP344.1m, excluding
exceptional items (2012: GBP237.3m) and the total operating costs
to sales ratio increased by 180 bps.
Year to Year to
31 August 31 August
2013 2012
GBP'000s (Audited) (Unaudited) Change
--------------------------------------- ----------- ------------- ---------
Distribution costs (115,172) (79,076) 46%
Payroll and staff costs (75,587) (50,070) 51%
Warehousing (44,302) (32,702) 35%
Marketing (40,934) (21,233) 93%
Production (4,360) (3,780) 15%
Technology costs (10,225) (8,023) 27%
Other operating costs (40,061) (32,167) 25%
Depreciation and amortisation (13,484) (10,224) 32%
--------------------------------------- ----------- ------------- ---------
Operating costs excluding exceptional
items (344,125) (237,275) 45%
Operating cost ratio (% of sales) 44.7% 42.9% (180bps)
--------------------------------------- ----------- ------------- ---------
We invested in increased marketing activities during the year,
particularly in digital marketing, including pay per click and
affiliate marketing, and in country-specific campaigns. Our digital
marketing expenditure was targeted on the UK, US, Australia, France
and Germany, and our marketing campaigns included our peak 'Best
Night Ever' campaign in the UK, US and Australia, and local
magazine partnerships in France and Germany. The results of these
activities are already visible in the strong worldwide growth in
sales and active customers during the year, and we expect continued
returns on this investment in each of our strategic markets during
the new financial year.
Our total headcount has increased by 318 employees during the
year to support our future growth plans. We also implemented a new
ASOS Long-Term Incentive Plan for senior management and recognised
an associated non-cash charge of GBP2.8m during the year. As a
result of these investments in our people, our payroll cost ratio
increased by 70bps to 9.8% of revenue (2012: 9.1%).
We continued to invest in our customer delivery proposition,
making improvements to our next day, express and standard options,
with both reduced lead-times and improvements to our service levels
including shorter delivery windows and an increased proportion of
tracked parcels. We also offered free international express
delivery above a minimum spend threshold. As a result, our
distribution cost ratio has increased by 70bps to 15.0% (2012:
14.3%).
We maintained tight cost control and delivered operating
leverage in our warehouse, production and technology activities.
The Barnsley fulfilment centre continued to perform strongly, with
a decline in average labour cost per unit for the year of 11%
compared with last year, resulting in an increase of only 35% in
total warehouse costs compared to a 43% increase in the number of
orders.
Depreciation and amortisation costs increased by 32%, largely as
a result of investment in our IT infrastructure.
Group profit
The Group generated profit before tax and exceptional items of
GBP54.7m, up 23% on last year (2012: GBP44.5m).
Year to Year to
31 August 31 August
2013 2012
GBP'000s (Audited) (Unaudited) Change
----------------------------------------------- ----------- ------------- -------
Revenue 769,396 552,854 39%
Cost of sales (370,816) (269,997)
----------------------------------------------- ----------- ------------- -------
Gross profit 398,580 282,857 41%
Distribution costs excluding exceptional
items (115,172) (79,076)
Administrative expenses excluding exceptional
items (228,953) (158,199)
----------------------------------------------- ----------- ------------- -------
Operating profit before exceptional
items 54,455 45,582 19%
Finance income 283 -
Finance expense (68) (1,109)
----------------------------------------------- ----------- ------------- -------
Profit before tax and exceptional items 54,670 44,473 23%
Exceptional items - (4,463)
----------------------------------------------- ----------- ------------- -------
Profit before tax 54,670 40,010 37%
Income tax expense (13,744) (10,473)
----------------------------------------------- ----------- ------------- -------
Profit after tax 40,926 29,537 39%
----------------------------------------------- ----------- ------------- -------
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 year ended 31 August 2013.
The main components of the exceptional charge to the profit and
loss account were as follows:
Year to Year to
31 August 31 August
2013 2012
GBP'000s (Audited) (Unaudited)
----------------------------- --- ------------ -------------
Dual site decollation costs - (228)
Vacant property costs - (1,435)
Impairment of assets - (2,800)
Total - (4,463)
---------------------------------- ----------- -------------
Taxation
The effective tax rate before exceptional items for the Group
was 25.1%, 90bps lower than the prior year (2012: 26.0%), as a
result of a reduction in the prevailing UK corporation tax rate.
Going forward, we would expect the effective rate of tax
pre-exceptional items to be around 150 bps higher than the
prevailing UK corporation tax rate due to permanent disallowable
items, including the charge in respect of the ASOS Long-Term
Incentive Plan.
Earnings per share
Basic underlying earnings per share(1) increased by 18% to 50.1p
per share (2012: 42.5p), and diluted underlying earnings per
share(1) increased by 24% to 49.2p per share (2012: 39.6p).
Basic earnings per share(2) increased by 31% to 50.1p per share
(2012: 38.1p), and diluted earnings per share(2) increased by 38%
to 49.2p per share (2012: 35.6p).
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 August 2013. This policy
remains under regular review.
(1) Underlying earnings per share has been calculated using
profit after tax but before exceptional items.
2Earnings per share has been calculated using profit after tax
and exceptional items of GBPnil (2012: GBP4.5m).
Statement of financial position
The Group enjoys a robust financial position including a strong
cash balance and a clean stock position as we begin the new
Autumn/Winter season. During the year, net assets increased by
GBP53.8m to GBP159.8m (31 August 2012: GBP106.0m), driven by profit
after tax for the year. The summary statement of financial position
is shown below.
As at As at
31 August 31 August
2013 2012
GBP'000s (Audited) (Unaudited)
-------------------------------------- ----------- -------------
Goodwill and other intangible assets 39,686 23,236
Property, plant and equipment 30,031 27,293
Deferred tax asset 8,902 8,111
-------------------------------------- ----------- -------------
Non-current assets 78,619 58,640
-------------------------------------- ----------- -------------
Working capital 12,257 19,038
Net funds* 71,139 27,884
Derivative financial assets 225 -
Current tax (liability)/asset (2,441) 425
-------------------------------------- ----------- -------------
Net assets 159,799 105,987
-------------------------------------- ----------- -------------
* Cash and cash equivalents less bank borrowings
Statement of cash flows
The Group generated cash of GBP43.3m during the year (2012:
GBP13.7m) and the closing cash balance was GBP71.1m at 31 August
2013, up from GBP27.9m at 31 August 2012. Net funds were GBP71.1m
(31 August 2012: GBP27.9m). The summary statement of cash flows is
shown below.
Year to Year to
31 August 2013 31 August 2012
GBP'000s (Audited) (Unaudited)
-------------------------------------------------------------- ---------------- ----------------
Operating profit 54,455 41,119
Exceptional items - 4,463
-------------------------------------------------------------- ---------------- ----------------
Operating profit before exceptional items 54,455 45,582
Depreciation and amortisation 13,484 10,224
Losses on disposal of assets 298 -
Working capital 5,391 (9,876)
Share-based payments charges 4,005 953
Tax (paid)/received (3,353) 1,883
Other non-cash items (104) -
Cash inflow from operating profit before exceptional items 74,176 48,766
Operating cash outflow relating to exceptional items - (1,695)
-------------------------------------------------------------- ---------------- ----------------
Cash inflow from operating profit 74,176 47,071
Capital expenditure (31,328) (21,654)
Proceeds from issue of ordinary shares 299 463
Net cash inflow/(outflow) relating to Employee Benefit Trust 160 (1,337)
Acquisition of subsidiary 36 -
Repayment of revolving credit facility - (10,000)
Net finance expense paid (88) (842)
Total cash inflow 43,255 13,701
-------------------------------------------------------------- ---------------- ----------------
Cash generated from operating profit before exceptional items
increased by GBP25.4m, due to EBITDA improvements of GBP12.1m and a
favourable working capital movement of GBP15.3m. This is the result
of a one-off VAT and duty benefit of GBP6.7m as we gained approval
to operate a bonded warehouse at Barnsley from January 2013, as
well as timing of supplier payments. Capital expenditure increased
by GBP9.7m on the prior year as we invested in our IT
infrastructure to drive future growth.
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 31 August
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
Year to Year to
31 August 31 August
2013 2012
GBP'000 (Audited) (Unaudited)
----------------------------- ----------- -------------
IT 21,337 14,832
Office fixtures and fit-out 3,842 2,437
Warehouse 7,791 3,786
Total 32,970 21,055
----------------------------- ----------- -------------
The majority of fixed asset additions were to enhance our
websites and underlying IT infrastructure to support future growth
and create a truly global platform, including the development of
our ASOS China operation and Russian website. We also developed our
new mechanised despatch sorting process and commenced the extension
to our Barnsley fulfilment centre.
During the next two years, we will significantly increase our
investment in our IT and logistics infrastructure to c.GBP55m per
year to support our future growth plans, including expenditure of
GBP25m-GBP30m on our Barnsley logistics hub during the year to 31
August 2014.
Outlook
We have started the new financial year positively. Our GBP1
billion sales target is now firmly in our sights and we have
stepped up our investment in people, technology, logistics and
marketing to support the significant global potential of the ASOS
business.
Nick Robertson Nick Beighton
Chief Executive Officer Chief Financial Officer
Audited Consolidated Statement of Comprehensive Income
For the year ended 31 August 2013
Year to 5 months
31 August to 31 August
2013 2012
GBP'000 GBP'000
Revenue 769,396 238,023
Cost of sales (370,816) (117,892)
----------- --------------
Gross profit 398,580 120,131
Distribution expenses (115,172) (35,906)
Administrative expenses (228,953) (70,883)
----------- --------------
Operating profit 54,455 13,342
Finance income 283 -
Finance expense (68) (97)
----------- --------------
Profit before tax 54,670 13,245
Income tax expense (13,744) (3,341)
----------- --------------
Profit for the period 40,926 9,904
=========== ==============
Net exchange adjustments
offset in reserves (45) -
Fair value gain on derivative
financial assets 225 -
----------- --------------
Other comprehensive income
for the period 180 -
=========== ==============
Total comprehensive income 41,106 9,904
=========== ==============
Profit attributable to:
Owners of the parent 40,928 9,904
Non-controlling interest (2) -
----------- --------------
40,926 9,904
=========== ==============
Total comprehensive income
attributable to:
Owners of the parent 41,108 9,904
Non-controlling interest (2) -
----------- --------------
41,106 9,904
=========== ==============
Earnings per share
Basic 50.1p 12.5p
Diluted 49.2p 11.9p
=========== ==============
Audited Consolidated Statement of Changes in Equity
For the year ended 31 August 2013
Employee Equity
Benefit attributable
Called up Share Retained Trust Hedging Translation to owners of Non-controlling Total
share capital premium earnings(1) reserve reserve reserve the parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 April 2012 2,699 5,749 89,719 (2,932) - - 95,235 - 95,235
Shares
allotted in
the period 155 356 - - - - 511 - 511
Cash received
on exercise
of shares
from Employee
Benefit Trust - - - 9 - - 9 - 9
Transfer of
shares from
Employee
Benefit Trust
on exercise - - (459) 459 - - - - -
Share based
payments
charge - - 344 - - - 344 - 344
Profit for the
period and
total
comprehensive
income - - 9,904 - - - 9,904 - 9,904
Deferred tax
on share
options - - (1,949) - - - (1,949) - (1,949)
Current tax on
items taken
directly to
equity - - 1,933 - - - 1,933 - 1,933
Balance as at
31 August
2012 2,854 6,105 99,492 (2,464) - - 105,987 - 105,987
============== ========== ============ ========= ======== ============ ============= ================ ========
Shares allotted in the year 36 263 - - - - 299 - 299
Net cash received on exercise of shares
from Employee Benefit Trust - - - 160 - - 160 - 160
Transfer of shares from Employee Benefit
Trust on exercise - - (534) 534 - - - - -
Share based payments charge - - 4,005 - - - 4,005 - 4,005
Profit/(loss) for the period - - 40,928 - - - 40,928 (2) 40,926
Other comprehensive income for the period - - - - 225 (45) 180 - 180
Deferred tax on share options - - 991 - - - 991 - 991
Current tax on items taken
directly to equity - - 7,251 - - - 7,251 - 7,251
Balance as at 31 August 2013 2,890 6,368 152,133 (1,770) 225 (45) 159,801 (2) 159,799
====== ====== ========= ======== ==== ===== ======== ==== ========
(1) Retained earnings includes the share-based payments
reserve
Audited Consolidated Statement of Financial Position
As at 31 August 2013
As at As at
31 August 31 August
2013 2012
GBP'000 GBP'000
Non-current assets
Goodwill 1,060 1,060
Other intangible assets 38,626 22,176
Property, plant and equipment 30,031 27,293
Deferred tax asset 8,902 8,111
----------- -----------
78,619 58,640
----------- -----------
Current assets
Inventories 143,348 100,263
Trade and other receivables 18,420 19,066
Derivative financial asset 225 -
Current tax asset - 425
Cash and cash equivalents 71,139 27,884
233,132 147,638
----------- -----------
Current liabilities
Trade and other payables (149,511) (100,291)
Current tax liability (2,441) -
----------- -----------
(151,952) (100,291)
----------- -----------
Net current assets 81,180 47,347
----------- -----------
Net assets 159,799 105,987
=========== ===========
Equity attributable to owners of the parent
Called up share capital 2,890 2,854
Share premium 6,368 6,105
Employee Benefit Trust reserve (1,770) (2,464)
Hedging reserve 225 -
Translation reserve (45) -
Retained earnings 152,133 99,492
----------- -----------
159,801 105,987
----------- -----------
Non-controlling interests (2) -
Total equity 159,799 105,987
=========== ===========
Audited Consolidated Statement of Cash Flows
For the year ended 31 August 2013
Year to 5 months
to
31 August 31 August
2013 2012
GBP'000 GBP'000
Operating profit 54,455 13,342
Adjusted for:
Depreciation of property, plant
and equipment 7,005 2,542
Amortisation of other intangible
assets 6,479 2,511
Loss on disposal of non-current 298 -
assets
Increase in inventories (42,882) (19,689)
Decrease in trade and other receivables 787 437
Increase in trade and other payables 47,486 18,068
Share-based payments charges 4,005 344
Other non-cash items (104) -
Income tax paid (3,353) -
---------- ----------
Net cash generated from operating
activities before exceptional items 74,176 17,555
Cash outflow relating to exceptional
operating items - (935)
---------- ----------
Net cash generated from operating
activities 74,176 16,620
Investing activities
Payments to acquire other intangible
assets (21,770) (5,672)
Payments to acquire property, plant
and equipment (9,558) (2,345)
Finance income 240 -
Acquisition of subsidiary 36 -
Net cash used in investing activities (31,052) (8,017)
Financing activities
Proceeds from issue of ordinary
shares 299 321
Net cash inflow relating to Employee
Benefit Trust 160 9
Repayment of revolving credit facility - (5,000)
Finance expense (328) (364)
---------- ----------
Net cash generated from/(used in)
financing activities 131 (5,034)
Net increase in cash and cash equivalents 43,255 3,569
========== ==========
Opening cash and cash equivalents 27,884 24,315
Closing cash and cash equivalents 71,139 27,884
========== ==========
Reconciliation of net cash flow to movement in net funds
Year to 5 months
31 August to
2013 31 August
GBP'000 2012
GBP'000
Net funds at beginning of the period 27,884 19,315
Increase in cash and cash equivalents 43,255 3,569
Decrease in revolving credit facility
liability - 5,000
----------- -----------
Net funds at end of the period 71,139 27,884
=========== ===========
Notes to the Financial Information
For the year ended 31 August 2013
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 year to 31 August 2013 and five months to 31
August 2012 do not comprise statutory financial statements within
the meaning of section 434 of the Companies Act 2006. The Report
and Accounts for the five months to 31 August 2012 have been filed
with the Registrar of Companies and those for the year to 31 August
2013 will be filed following the Company's annual general meeting.
The preliminary announcement for the year to 31 August 2013 has
been prepared on a consistent basis with the financial accounting
policies set out in the Accounting Policies section of the ASOS Plc
Report and Accounts for the five months to 31 August 2012.
The condensed consolidated financial information should be read
in conjunction with the Group's Annual Report and Accounts for the
year ended 31 August 2013, 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 for
the year ended 31 August 2013 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 Group's Annual Report and
Accounts for the year to 31 August 2013.
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. The Chief Operating Decision Maker 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.
Year to 31 August 2013
UK US EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Retail sales 276,027 77,678 177,708 222,394 753,807
Delivery receipts 5,314 1,456 2,212 3,028 12,010
Third party revenues 3,579 - - - 3,579
---------- --------- --------- ---------- ----------
Total revenue 284,920 79,134 179,920 225,422 769,396
Cost of sales (148,685) (32,687) (88,865) (100,579) (370,816)
---------- --------- --------- ---------- ----------
Gross profit 136,235 46,447 91,055 124,843 398,580
Distribution costs (26,140) (27,804) (27,046) (34,182) (115,172)
---------- --------- --------- ---------- ----------
Segment result 110,095 18,643 64,009 90,661 283,408
Administrative expenses (228,953)
----------
Operating profit 54,455
Finance income 283
Finance expense (68)
----------
Profit before tax 54,670
==========
5 months to 31 August 2012
UK US EU RoW Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Retail sales 81,658 22,036 50,855 76,685 231,234
Delivery receipts 3,035 512 719 904 5,170
Third party revenues 1,617 - 1 1 1,619
---------- --------- --------- ---------- ----------
Total revenue 86,310 22,548 51,575 77,590 238,023
Cost of sales (45,775) (9,579) (26,707) (35,831) (117,892)
---------- --------- --------- ---------- ----------
Gross profit 40,535 12,969 24,868 41,759 120,131
Distribution costs (8,413) (7,102) (7,436) (12,955) (35,906)
---------- --------- --------- ---------- ----------
Segment result 32,122 5,867 17,432 28,804 84,225
Administrative expenses (70,883)
----------
Operating profit 13,342
Finance expense (97)
----------
Profit before tax 13,245
==========
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 Chief Operating Decision Maker 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. 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.
Year to 5 months
31 August to
2013 31 August
2012
No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for basic
earnings per share 81,751,253 79,078,431
Effect of dilutive options 1,374,566 3,951,661
-------------- --------------
Weighted average shares in issue for diluted
earnings per share 83,125,819 83,030,092
============== ==============
Year to 5 months
31 August to
2013 31 August
2012
GBP'000 GBP'000
Earnings
Underlying earnings attributable to owners
of the Parent 40,928 9,904
Year to 5 months
31 August to
2013 31 August
2012
Pence Pence
Earnings per share
Basic earnings per share 50.1 12.5
Diluted earnings per share 49.2 11.9
================ ===========
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. 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.
4. Reconciliation of net funds
Year to Year to
31 August 31 August
2013 2012
GBP'000 GBP'000
Net movement in cash and cash equivalents 43,255 3,569
Repayment of revolving credit facility - 5,000
----------- -----------
Net movement in net funds 43,255 8,569
Opening net funds 27,884 19,315
----------- -----------
Closing net funds 71,139 27,884
=========== ===========
Closing net funds comprises:
Cash and cash equivalents 71,139 27,884
Net funds 71,139 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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