TIDMASC
RNS Number : 4926K
ASOS PLC
11 April 2018
11 April 2018
ASOS plc
Global Online Fashion Destination
Interim Results for the six months to 28 February 2018
Summary financial results
Six months Six months CCY(2)
GBPm(1) to to Change Change
28 February 28 February
2018 2017
----------------------------- ------------- ------------- --------- --------
Group revenues(3) 1,158.1 911.5 27% 25%
Retail sales 1,131.3 889.2 27% 26%
UK retail sales 414.5 340.8 22% 22%
International retail sales 716.8 548.4 31% 28%
Gross profit 569.4 440.1 29%
Retail gross margin 48.0% 47.0% 100bps
Gross margin 49.2% 48.3% 90bps
Profit before tax 29.9 27.3 10%
Diluted earnings per share 29.2p 26.3p 11%
Cash and cash equivalents 37.7 154.3 (76%)
----------------------------- ------------- ------------- --------- --------
(1) All numbers subject to rounding throughout this document,
(2) Constant currency is calculated to take account of hedged rate
movements on hedged sales and spot rate movements on unhedged
sales, (3) Includes retail sales, delivery receipts and third party
revenues
Results summary
-- Retail sales grew at +27% on a reported basis
and +26% on a constant currency basis
-- Strong growth across both UK, +22%, and international
territories, +31%, (constant currency +28%)
-- Retail gross margin up 100bps
-- PBT up 10% at GBP29.9m in line with guided
H1:H2 split
-- Continued strong customer engagement: active
customers(4) +17%, average basket value +2%,
order frequency(5) +8%
-- Total orders placed 29.9m, +28% year on year.
First half site visits exceeded 1 billion
for the first time
-- Euro hub phase two progressing well, US hub
phase one opening early: building towards
GBP4 billion of net sales
-- Cash balance of GBP37.7m reflecting working
capital and capex investment
Guidance and medium term outlook
-- No change to FY18 reported sales or EBIT guidance; c.25-30%
and c.4% margin respectively
-- Capex guidance increased to GBP230-GBP250m in FY18 supporting
strong momentum in business
-- Medium term reported sales growth guidance remains unchanged
at c.20-25% p.a. with a c.4% EBIT margin
Nick Beighton, CEO, commented:
"These results show strong trading at the same time as we are
making substantial investment in our future. Our customer
engagement is going from strength to strength and we've achieved
more than a billion site visits for the first time. Alongside our
investment in our people and our technology, we are accelerating
investment in our distribution and logistics, laying the foundation
for GBP4 billion of net sales, a further step in building ASOS into
the world's number one destination for fashion loving
20-somethings."
(4) Defined as having shopped in the last twelve months as at 28
February 2018, (5) Calculated as last twelve months' total orders
divided by active customers
Investor and analyst meeting:
There will be a meeting for analysts that will take place at
9.30am today, 11 April 2018, at Numis Securities, 10 Paternoster
Row, London EC4M 7LT. Photo ID and security checks will be required
so please ensure prompt arrival. 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 Tom Berger at
Instinctif Partners on either 020 7457 2834 or
tom.berger@instinctif.com.
For further information:
Tel: 020 7756
ASOS plc 1000
Nick Beighton, Chief Executive
Officer
Greg Feehely, Director of Investor
Relations
Website: www.asosplc.com/investors
Instinctif Partners Tel: 020 7457
2020
Matthew Smallwood / Justine Warren
/ Tom Berger
JPMorgan Cazenove (Nominated Tel: 020 7742
Advisor) 4000
Michael Wentworth-Stanley / Bill
Hutchings
Numis Securities Tel: 020 7260
1000
Alex Ham / Luke Bordewich
Forward looking statements:
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements" (including words such as
"believe", "expect", "estimate", "intend", "anticipate" and words
of similar meaning). By their nature, forward-looking statements
involve risk and uncertainty since they relate to future events and
circumstances, and actual results may, and often do, differ
materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with
respect to future events as at the date of this announcement. Save
as required by applicable law, the Company undertakes no obligation
to publicly revise any forward-looking statements in this
announcement, whether following any change in its expectations or
to reflect events or circumstances after the date of this
announcement.
Background note
ASOS is a global fashion destination for 20-somethings, selling
cutting-edge fashion and offering a wide variety of fashion-related
content, making ASOS.com the hub of a thriving fashion community.
ASOS sells over 87,000 branded and 'ASOS Design' products through
localised app and mobile/ desktop web experiences, delivering from
fulfilment centres in the UK, US and Europe. ASOS tailors the mix
of ASOS design (our in house designed label), global and local
brands sold through our own channels to deliver a locally relevant
product offer. Our global propositions help bring our amazing
product to nearly every country in the world and we serve customers
globally with increasingly tailored local experiences: Relevant
languages, payment methods and delivery and return options. You can
currently shop ASOS in over 200 markets, in 6 major global
languages, using an ever greater number of different global payment
methods, with hundreds of local delivery and returns options from
pick and drop off networks in Italy to Next Day delivery to home in
the Netherlands. We aim to offer all our global customers a truly
frictionless experience.
ASOS's websites attracted 156.9m visits during February 2018
(February 2017: 127 million) and as at 28 February 2018 had 16.5m
active customers(1) (28 February 2017: 14.1m), of which 5.5m were
located in the UK and 11.0m were located in international
territories (28 February 2017: 5.0m in the UK and 9.1m
internationally).
(1) Defined as having shopped in the last twelve months as at 28
February 2018
ASOS plc ("the Group")
Global Online Fashion Destination
Interim Results for the six months to 28 February 2018
Summary
ASOS reports further progress with a strong trading performance
for the six months to 28 February 2018. The Group delivered retail
sales growth of 27% to GBP1,131.3m (H1 2017: GBP889.2m), once again
driven by strong product and proposition improvements. Profit
before tax grew by 10% to GBP29.9m (H1 2017: GBP27.3m). Retail
gross margin increased by 100bps to 48.0% (H1 2017: 47.0%).
Performance continued to be strong in the UK at 22% sales growth
with active customer growth of 10% to 5.5m. EU retail sales grew
32% in constant currency with active customers growing 26% to over
6.3m. US sales grew 27% in constant currency with active customers
growing 10% to 2.2m. ROW sales grew 24% in constant currency with
active customers growing 19% to 2.5m. For the first time, ASOS had
over 1 billion site visits during the first half year.
The level of growth over the recent years remains at the top of
our medium term planning assumptions and we need to invest more
quickly in our business to support this momentum. We are
accelerating some of our capital investment projects - notably in
our distribution and logistics - around the world. Having invested
just over GBP95m of capex in the first half, total capex is set to
increase to between GBP230m to GBP250m in both this financial year
(FY18) and next (FY19) as we build towards GBP4 billion of net
sales capacity. Our banking facilities were put in place five years
ago and we are currently finalising a GBP150m revolving credit
facility during this period of intense investment.
During the half we also made significant working capital
investment of GBP82.5m, largely in inventory and trade payables.
The former (GBP46.7m, +14.4%) reflects the growth in our business,
improved product availability, and inventory in multiple
distribution centres to fulfil our global customer service promise.
The decrease in trade and other payables broadly reflects the
position last August which was approximately GBP40m higher than
normal due to slower payments ahead of the planned introduction of
our new finance system.
Our capital investment and these movements in working capital
resulted in our cash balance of GBP37.7m at the half year end.
Taking into account our capital investment plans and free cash
generation through the second half, cash balances at the full year
are expected to be at a broadly similar level to that at the half
year.
Improvements to the customer proposition continued at pace, with
almost 100 delivery solutions improvements and 1,200 tech releases
made in the last six months. Our continuous product evolution saw
115 new brands added, whilst a similar number were edited out. We
created a more localised site experience for over 200 countries
with the build of new 'Rest of Europe', 'Rest of World' and UK
sites. The next six months will see the addition of two new
language specific sites as we maintain momentum in localising
experiences globally.
There is no change to either sales or EBIT guidance for both the
financial year and the medium term. Our mission remains to be the
world's number one destination for fashion loving 20-somethings.
The apparel market continues to undergo significant channel shift
and ASOS market shares remain relatively modest around the world,
offering significant opportunities for continuing growth in the
years to come.
In pursuing our mission to be the favourite destination for the
world's fashion conscious 20-somethings, we continue to focus on
our four defendable pillars through which we differentiate our
brand: our Purpose, our Product, our Proposition and our
People.
Our Purpose
The ASOS Purpose is to 'give you the confidence to be whoever
you want to be'. This underpins the product and proposition we
present, the way we do business, as well as the way we interact and
engage with our customers.
Continued investments are enabling strong engagement levels
across our customer base. Site visits increased by 25%
year-on-year; average order frequency improved by 8%; average
basket value increased by 2% alongside a 10bps improvement in
conversion. Active customers are now at 16.5m, representing a 17%
increase since last year. We now have twice as many customers
outside the UK as in our home market.
We continue to engage with our customer demographic in a range
of ways, such as a focus on students with a specific discount
proposition, as well as an increasing share across expanding
category segments such as Activewear and Face + Body, supported by
highly visible brand campaigns.
We maintained investment in relevant, emerging content formats
including Instagram Stories and cross-channel video. Our Instagram
Stories were viewed over 30 million times and videos were viewed
more than 52 million times, up from 40 million in the previous
half. ASOS continues to experiment with pioneering advertising
betas across key international markets, including the Snapchat
Promoted Stories, testing utilisation of the platforms that matter
most to fashion loving 20-somethings. This has meant increasing
reach and more immersive experiences for our customers.
This season saw further collaborations in support of charities,
including the sale of 'Choose Love T-shirts' in aid of the Help
Refugees charity with 100% of the profits helping to raise funds
and awareness for refugees across Europe and the Middle East. We
continue to sell product in support of numerous inclusive
movements, accelerating awareness and creating meaningful
change.
Sustainability remains a key focus and an integral part of the
ASOS Purpose. We are therefore firmly committed to achieving
ambitious targets. 70% of our cotton is now sustainably sourced and
expectations are to achieve our commitment of 100% by 2025 ahead of
time.
Additionally, we have successfully utilised the mapping of our
viscose supply chain to support the commitment to responsible
sourcing of forestry products. We have also published 2020 targets
on circular fashion including a commitment to take back used
clothing from customers, training the design team on circular
fashion design, and increasing use of post-consumer used textiles.
Environmental benchmarking of 30% of ASOS suppliers has enabled
identification of environmental risks and enhancement of best
practice in garment and fabric manufacture.
ASOS views its commitment to 'Fashion with Integrity' as a
critical investment in the future of our business.
Our Product
ASOS offers customers the greatest, most relevant edit of great
value fashion to an inclusive 20-something audience. The
architecture of the ASOS portfolio of brands has been simplified
during the first half, for example with "Own Brand" now known as
ASOS Design. Our ASOS portfolio of brands continues to grow,
complementing our curated edit of the best third party brands from
across the globe. Sales of ASOS Brand accounted for c.39% of sales
in H1 2018. ASOS continues to delight customers with a constant
flow of new styles landing on site, a key differentiator of the
ASOS offering. Each week 4,000-5,000 new styles are launched with
c.87,000 products in stock at any one point in time.
This season, as always, saw the introduction of a significant
number of new brands, including Tommy Jeans, Morgan and Ivy Park,
whilst a similar number were edited out to ensure our proposition
remains relevant and exciting. The combination of ASOS Brand and
exclusive collaborations with third party brands leads to 55-60% of
ASOS product only being available to customers through the ASOS
sites, an additional important point of differentiation.
Building on the success of the branded activewear offering that
launched last year, the ASOS 4505 activewear range successfully
debuted in January 2018 alongside the #ReasonsToMove campaign. The
range covers a variety of end use activity and 90% of the product
has high performance, technical properties. As part of ASOS's
mission to help young people look, feel and be their best, we
designed and created the outfits for team Paralympics GB to wear at
the Pyeongchang Winter Games in March 2018.
The highly acclaimed ASOS Face + Body "go play" campaign that
launched in September marked our entry into this segment, a market
that is predicted to be worth GBP450bn per annum globally by 2020.
We are excited to announce a new relationship with the Estee Lauder
Group. MAC launched on site last month and will be followed by many
more brands from Estee Lauder. Other exciting launches in this
category include House of 99 by David Beckham and an exclusive
range with Crayola - an extension of the playful approach we have
taken to this category.
Our Proposition
ASOS continue to invest in improvements to our 'best in class
proposition', aiming for a friction free experience at every stage
of the customer journey.
The business had another productive six months driving our
agenda of technology change and innovation. 1,200 digital platform
releases have already been made since the start of the financial
year, further demonstrating the flexibility and pace of change
being delivered.
These releases provided a number of new customer features and
changes to the shopping experience. Highlights from the first six
months include design improvements to apps including enhancements
for visual search and product recommendations, the launch of
GooglePay on Android app and the full roll out of refreshed site
navigation for web and mobile web. The refreshed navigation has
been the largest design change to the ASOS shopping experience for
many years and significantly improves how customers search, browse
and explore products, further improving page download speeds.
ASOS's 'Customer Privacy Programme' has also progressed, with
new customer marketing and communication consent journeys going
live at the end of February. This programme is focussed on
delivering an open and transparent way for our customers to manage
their privacy needs, ahead of GDPR regulation coming into effect on
25 May.
A new returns 'portal' was piloted for Australian customers,
improving the returns experience and allowing sight and status
tracking of returned orders. This feature, integrated within the
'My Account' section of our website and app, will soon be extended
to other markets.
During the last six months changes have also been made to
further drive localisation as part of our international growth
strategy. Two new local foreign sites and apps have been added -
one to serve our 'Rest of World' customers and another to cover
those in the 'Rest of Europe'. These new sites allow tailoring of
the experience for these specific markets, giving different
content, visual merchandising and price zones. Further flexibility
will be driven by the ability to control stock and fulfilment logic
for these sites independently from the UK.
The launch of these two new sites followed the release of a UK
specific site and app. This has for the first time allowed direct
merchandising and tailoring of the experience for UK customers,
rather than a global proposition shopped by a global customer base.
This functionality was utilised with the launch of 'Try Before You
Buy' in the UK, showing banners within the UK app, which would not
have been possible previously. Further progress was also made in
improving the proposition and experience globally with the launch
of ASOS Premier into six new countries (Sweden, Austria, Belgium,
Ireland, Denmark and the Netherlands). This followed the release of
technology changes which will allow roll out of ASOS Premier to any
country going forward.
Our technology team have continued to make progress supporting
traffic and order volume growth. This was demonstrated with a very
successful peak trading period during which record sales levels
were processed without any customer issues.
Progress continues on our major transformation programmes
including the new end-to-end merchandising and planning system,
Truly Global Retail (TGR), which will support the ability to buy,
sell and account for stock in multiple locations and currencies.
The last six months saw the implementation of both the new people
and finance systems.
Over the next six months we will continue to improve the
customer experience in many ways. This will include speeding up the
refund process, offering online gift vouchers to international
customers as well as launching new payment methods, new language
sites and new delivery propositions.
We have been driving growth and profitability by optimising
customer experience through AI over a number of years now and we
are aiming to establish AI development capability in every area of
the business, from customer experience, customer care, supply chain
and retail in pursuit of being a truly data driven organisation.
Visual search, product recommendation, fit analytics and shopping
through Facebook Messenger are all examples of how AI can delight
customers. We are therefore investing heavily in the technology,
processes and people needed to make a step change in the
productivity of AI development processes.
Within warehousing, the Euro hub phase two extension is
progressing at pace and to plan. Within the first half, handover of
the site was completed along with delivery and commencement of
installation for the automated storage system. This automated
storage system is currently 50% complete and on track for
completion before peak trading. Good progress is also being made on
the new warehouse management system which will be installed at the
start of FY19.
The new US warehouse has also made significant progress since
the start of the financial year. A variety of improvements have
been made to the site in addition to the installation of a storage
mezzanine and parcel despatch sorter, both of which are on track to
being operational by the end of the year.
Within our UK hub at Barnsley, work is currently underway to
increase the stockholding capacity through the construction of an
additional mezzanine. This will increase capacity by a further 10%
to 22 million units and is scheduled to complete by the end of
April. All of these investments will combine to deliver future
capacity for GBP4 billion of net sales.
Once again, both the Euro hub and the UK hub saw record volumes
processed over the Black Friday period. Euro hub despatched 1.9
million units in the peak seven days on a manual solution whilst
the UK hub processed 4 million units in the same period.
The first six months of the year saw a continued focus on
improving delivery and returns for customers, with 92 improvements
to proposition made globally. The ramp up of fulfilment from the
Euro hub has allowed ASOS to begin deploying improvements to the
European proposition. Saturday delivery for both Next Day and
Standard was launched into Germany along with an extension of the
Saturday ordering cut off times across the EU for Next Day
delivery. Click and Collect launched into Germany and Austria,
adding almost 20,000 locations to the global offering. March also
saw the launch of Click and Collect into Russia.
Within the UK, Next Day delivery launched into the Channel
Islands and Next Day delivery cut off was improved to midnight on
Sunday, in line with weekdays. New Click and Collect providers were
also added, taking total coverage up to 18,000 UK locations.
We moved in to our new 80,000 square feet Customer Care site in
Leavesden, North Watford completing the project ahead of peak
trading. This has allowed the in-sourcing of a higher proportion of
Customer Care work that has driven increased quality of service and
reduced costs.
Our People
Supporting our customers, our own teams and our partners to
realise their potential is our fourth pillar in ensuring our brand
remains defendable, differentiated and desirable.
At the end of February 2018, ASOS employed 4,277 people with the
majority based at our headquarters in Camden, North London and our
Customer Care site in Leavesden, with smaller teams in Paris,
Birmingham, Barnsley, Berlin, New York and Sydney. Over the past
six months, we have strengthened our teams in business critical
areas, with the most positions being added in Retail, Technology
and Customer Care.
Attracting, retaining and helping the best talent to thrive at
ASOS remains a number one priority and in the last year, we have
put an increased focus on Emerging Talent Development. In September
2017, we initiated our first ever graduate programme which welcomed
31 graduates across the business. Our intern programme continues to
grow and we have also designed and delivered our first ever
apprenticeship programme for Buying and Merchandising.
Over the past six months, we have continued to invest in
supporting the development needs of our people. September 2017 saw
the launch of the ASOS Academy, with the overarching mission of
instilling the confidence to be their best selves in our teams.
We continue to view ethical trade as a core business
responsibility. A two-pronged Ethical Trade Strategy focusses on
improving business practices to protect human rights in the supply
chain from the top down, while empowering workers to realise their
fundamental rights from the bottom up. Our focus centres on
transparency, purchasing practices, freedom of association, living
wage, gender equality, health and safety, child labour, modern
slavery and third party brands.
ASOS has made significant progress towards furthering respect
for human rights in the supply chain. Most recently, we partnered
with the British High Commission in Mauritius to host an event on
modern slavery, labour migration and workers' rights. In late
March, ASOS co-hosted an event at the House of Lords with the All
Party Parliamentary Group on Ethics and Sustainability in Fashion
and Anti-Slavery International to address risks in the apparel
sector supplier base.
Investment
We invested just over GBP95m of capex in the first half, across
technology and transformation programmes (c.50% of total capex) and
the balance in physical infrastructure across supply chain
infrastructure as well as the investment in our head office. These
infrastructure programmes included further optimisation of
Barnsley, automating and extending Euro hub and fitting out the US.
Total capex will be between GBP230m to GBP250m in both the current
and the following two financial years. We expect to be free cash
flow negative this year, extending into the next financial year,
returning to free cash flow positive in FY2020.
During the half we also made significant working capital
investment of GBP82.5m, largely in inventory and payables. The
former (GBP46.7m, +14.4%) reflects additional stock cover to
improve availability as we enter the new season, holding stock
across multiple distribution centres as well as fulfilling the
sales growth trajectory of the business. The decrease in trade and
other payables broadly reflects the position last August which was
approximately GBP40m higher as a consequence of slower payments,
ahead of the planned introduction of our new finance system. This
is approximately GBP15m higher than we had previously
anticipated.
Our capital investment and these movements in working capital
resulted in our cash balance of GBP37.7m at the half year end.
Taking into account our capital investment plans and free cash
generation through the second half, cash balances at the full year
are expected to be at a broadly similar level to that at the half
year. Our banking facilities were put in place five years ago and
we are currently finalising a GBP150m revolving credit facility
during this period of intense investment.
The extension and refit of the head office in Camden will
continue, increasing space from 180,000 ft2 to 243,000 ft2 which,
when combined with the very latest technology, will provide
sufficient flexibility to accommodate significant future headcount
growth.
Outlook
We remain in a period of high investment, pursuing the
considerable opportunity we see ahead for ASOS. We are confident
that by concentrating on successfully executing our investments, we
are positioning ASOS to be the world's number one destination for
fashion loving 20-somethings. Whilst we concentrate on investing in
our future, we remain equally focussed on our core financial
disciplines and are pleased that both our current year and our
medium term sales and EBIT margin guidance remain unchanged.
Nick Beighton
Chief Executive Officer
Financial review
Revenue
Six months to 28
February 2018 Group International
GBPm total UK US EU RoW total
---------------------- -------- ------ ------ ------ ------ --------------
Retail sales 1,131.3 414.5 149.0 349.1 218.7 716.8
Growth 27% 22% 20% 40% 25% 31%
Growth at constant
exchange rate 26% 22% 27% 32% 24% 28%
Delivery receipts 23.9 9.2 3.7 7.1 3.9 14.7
Growth 24% 21% 28% 45% - 26%
Third party revenues 2.9 2.8 0.1 - - 0.1
Growth (3%) (3%) - - - -
Total revenues 1,158.1 426.5 152.8 356.2 222.6 731.6
Growth 27% 21% 20% 40% 24% 31%
Growth at constant
exchange rate 25% 21% 27% 32% 23% 28%
---------------------- -------- ------ ------ ------ ------ --------------
The Group generated retail sales growth of 27% during the
period, with UK growth of 22% and strong international growth of
31% (28% constant currency). International retail sales accounted
for 63% (H1 2017: 62%) of total retail sales.
UK retail sales grew by 22% despite a challenging market, aided
by new category expansion and proposition enhancements such as 'Try
Before You Buy'. ASOS retained its first place position for unique
visitors to apparel retailers in the 15-34 age range (Comscore,
February 2018).
US retail sales grew by 20% (27% in constant currency) driven by
average basket value and conversion improvements. The USD became a
headwind in H1 from a sales perspective as the pound strengthened
against the dollar. As our USD sales are largely naturally hedged
across the Group, movements in the exchange rate will impact
reported sales growth in the US territory.
EU retail sales grew significantly at 40% (32% in constant
currency) driven by strong growth in France and Germany in
particular, alongside further proposition improvements, and ASOS
Premier launching in new countries (Austria, Ireland, the
Netherlands, Belgium, Denmark and Sweden). Key engagement has
driven conversion up 20bps and average basket values up 3%.
Rest of World retail sales grew by 25% (24% in constant
currency), augmented by an enhanced customer proposition in certain
territories. Exceptional retail growth last year has created 84%
growth over the last two years (77% constant currency).
Delivery receipts increased by 24% which marginally lagged
retail sales growth as customers increasingly took advantage of
more extensive free shipping options. The number of premier
customers increased by 55%.
Customer engagement
ASOS has seen a significant increase in active customers(1) ,
finishing February with 16.5m, up 17% compared to last year.
Engaging content and investments in the technology platform have
helped drive this growth as well as a 25% increase in the number of
visits. The compelling nature of the ASOS proposition drove
increases in average basket value of 2%, conversion(2) increased by
10bps and average order frequency(3) increased by 8%. Average
selling price is down 2% driven by a change in product mix since
the launch of the 'Face + Body' campaign and success of new lower
price point brands.
Six months Six months Change
to 28 February to 28 February
2018 2017
--------------------------------- ---------------- ---------------- --------
Active customers(1) (m) 16.5 14.1 17%
Average basket value (including
VAT) GBP72.35 GBP70.86 2%
Average units per basket 2.86 2.76 4%
Average selling price
per unit (including VAT) GBP25.28 GBP25.69 (2%)
Average order frequency(3) 3.41 3.15 8%
Total orders (m) 29.9 23.3 28%
Total visits (m) 1,005.0 804.8 25%
Conversion(2) 3.0% 2.9% +10bps
Mobile device visits 76.0% 68.4% +760bps
--------------------------------- ---------------- ---------------- --------
(1) Defined as having shopped during the last twelve months as
at 28 February 2018
(2) Calculated as total orders divided by total visits
(3) Calculated as last twelve months' total orders divided by
active customers
Gross profitability
Six months to
28 February 2018 Group International
total UK US EU RoW Total
--------------------- ------- --------- ------- ------ --------------
Gross profit (GBPm) 569.4 190.3 89.8 173.4 115.9 379.1
Growth 29% 22% 17% 51% 25% 33%
Retail gross margin 48.0% 43.0% 57.7% 47.6% 51.2% 50.8%
Growth 100bps 40bps (180bps) 330bps 70bps 110bps
Gross margin 49.2% 44.6% 58.8% 48.7% 52.1% 51.8%
Growth 90bps 30bps (160bps) 330bps 50bps 100bps
--------------------- ------- --------- --------- ------- ------ --------------
Group retail gross margin increased by 100bps to 48.0% compared
to last year (H1 2017: 47.0%) due to a positive net FX position and
improved buying margin partially offset by clearance depth and
third party/ASOS Design mix. Gross margin (including delivery
receipts and third-party revenues) increased by 90bps to 49.2% (H1
2017: 48.3%) due to the growth in retail margin offset by delivery
receipts growing at a marginally slower rate to retail sales.
Operating expenses
The Group increased its investment in operating resources by 31%
to GBP539.7m, with the total operating costs to revenue ratio
increasing by 130bps to 46.6% (H1 2017: 45.3%).
Six months Six months
to 28 to 28
February % of February % of
GBPm 2018 sales 2017 sales Change
Distribution costs (178.5) 15.4% (140.2) 15.4% (27%)
Payroll and staff
costs(1) (92.8) 8.0% (74.1) 8.1% (25%)
Warehousing (113.5) 9.8% (74.3) 8.2% (53%)
Marketing (57.3) 5.0% (48.1) 5.3% (19%)
Production (3.6) 0.3% (3.6) 0.4% -
Technology costs (21.3) 1.8% (16.4) 1.8% (30%)
Other operating
costs (47.8) 4.1% (34.8) 3.8% (37%)
Depreciation and
amortisation (24.9) 2.2% (21.5) 2.3% (16%)
-------------------- ----------- -------- ----------- -------- -------
Total operating
costs (539.7) 46.6% (413.0) 45.3% (31%)
-------------------- ----------- -------- ----------- -------- -------
(1) Inclusive of non-cash share-based payment charges
Distribution costs remained flat at 15.4% of revenue, driven by
improved standard delivery services offset by investment into free
return propositions in new territories.
Payroll and staff costs decreased by 10bps to 8.0% of sales as a
result of cost leveraging. Headcount has increased 36% (H1 2018:
4,277; H1 2017: 3,146). Non-cash share-based payment charges
amounted to GBP4.8m (H1 2017: GBP3.4m) relating to a new Long-Term
Incentive Scheme granted during the year and a higher uptake in our
Save As You Earn scheme launched last year.
Warehousing costs increased by 160bps to 9.8% of revenue due to
increased fulfilment mix from Euro hub which is currently a more
manual operation, partly offset by efficiencies achieved at
Barnsley from automation investments.
Marketing costs decreased by 30bps to 5.0% of sales driven by
digital marketing efficiencies and a higher return on advertising
spend.
Technology costs remained flat at 1.8% of revenue.
Other operating costs increased by 30bps to 4.1% of revenue.
Depreciation and amortisation decreased by 10bps to 2.2% of
revenue. Given the increase in capital expenditure over recent
periods this charge will increase moving forward as a percentage of
revenue as the major projects come on stream.
Income statement
The Group generated profit before tax of GBP29.9m, up 10%
compared to last year. This was behind sales growth due to gross
margin improvements of 90bps being offset by increased investment
in operating costs.
Six months Six months
to to
28 February 28 February
GBPm 2018 2017
------------------------- ------------- -------------
Revenue 1,158.1 911.5
Cost of sales (588.7) (471.4)
------------------------- ------------- -------------
Gross profit 569.4 440.1
Distribution expenses (178.5) (140.2)
Administrative expenses (361.2) (272.8)
Operating profit 29.7 27.1
Net finance income 0.2 0.2
------------------------- ------------- -------------
Profit before tax 29.9 27.3
------------------------- ------------- -------------
Income tax expense (5.4) (5.4)
------------------------- ------------- -------------
Profit after tax 24.5 21.9
------------------------- ------------- -------------
Effective tax rate 18.1% 19.8%
------------------------- ------------- -------------
Taxation
The effective tax rate decreased by 170bps to 18.1% (H1 2017:
19.8%). This arose mainly from the effect of the substantively
enacted UK corporation tax rate being reduced to 17% after 1 April
2020 on the deferred tax on accelerated capital allowances and
Research and Development expenditure credits.
Going forward, ASOS expects the effective tax rate to be
approximately 100bps higher than the prevailing rate of UK
corporation tax due to permanently disallowable items.
Earnings per share
Basic and diluted earnings per share increased by 11% and 11% to
29.4p and 29.2p respectively (H1 2017: 26.4p and 26.3p). This was
driven by the increase in profit before tax during the year.
Statement of financial position
The Group's financial position remains robust with movements
reflecting the current accelerated level of investment underway.
The increase in net assets of GBP86.9m to GBP374.0m during the
period (31 August 2017: GBP287.1m) was largely seen in higher
capital expenditure and an increase in inventory. The closing stock
position was up 14% versus the year end as we continue to improve
availability across two distribution hubs. Inventory was up 49%
against last year which reflects annualisation of a tightly managed
stock position and improved availability in the current financial
year. As a result of the capital expenditure, the higher inventory
position and the trade payables carryover, the cash balance
decreased to GBP37.7m (detailed more fully on page 12).
There was a reduction of GBP70.1m in the fair value of the net
position of outstanding forward contracts since 31 August 2017 as
hedges, which were entered into at adverse pre-Brexit rates,
settled during the period and exchange rates relating to the
remaining forward contracts have improved. The deferred tax
movement of GBP13.1m is a result of moving from a net derivative
financial liability as at 31 August 2017 to a net derivative
financial asset position as at 28 February 2018. The summary
statement of financial position is shown below:
At At
GBPm 28 February 2018 31 August 2017
-------------------------------------- ------------------ ----------------
Goodwill and other intangible assets 205.5 178.0
Property, plant and equipment 192.3 137.4
Derivative financial assets 8.0 1.3
Deferred tax asset - 9.2
-------------------------------------- ------------------ ----------------
Non-current assets 405.8 325.9
-------------------------------------- ------------------ ----------------
Inventories 370.0 323.3
Net current payables (432.2) (452.1)
Cash and cash equivalents 37.7 160.3
Derivative financial liabilities (1.1) (64.5)
Current tax liability (2.3) (5.8)
Deferred tax liability (3.9) -
Net assets 374.0 287.1
-------------------------------------- ------------------ ----------------
Statement of cash flows
The Group's cash balance decreased by GBP122.6m to GBP37.7m
during the period (31 August 2017: GBP160.3m) as a result of
capital expenditure of GBP95.4m, alongside a cash outflow from
operating activities of GBP27.8m, driven principally by EBITDA of
GBP54.6m offset by a movement in working capital of GBP82.5m. The
year on year rise in working capital outflow to GBP82.5m has been
driven by two factors. Firstly, the movement in trade payables was
caused by the timing of payments at the year end as we transitioned
to the new Finance system. Secondly, the movement in inventory year
on year is caused by the annualisation of a tightly managed stock
position, and an improvement to stock availability to meet new
season demand.
GBPm Six months to 28 February 2018 Six months to 28 February 2017
---------------------------------------------------- ------------------------------- -------------------------------
Operating profit 29.7 27.1
Depreciation and amortisation 24.9 21.5
Losses on disposal of non-current assets 0.4 0.1
Investment write off 0.1 -
Working capital (82.5) (7.7)
Share-based payments charge 4.8 3.4
Other non-cash items 1.3 (1.0)
Tax paid (6.5) (1.2)
Cash (outflow)/inflow from operating activities (27.8) 42.2
Capital expenditure (95.4) (62.4)
Net finance income received 0.2 0.6
Net cash inflow relating to Employee Benefit
Trust(1) 0.9 0.2
Total cash outflow (122.1) (19.4)
Opening cash and cash equivalents 160.3 173.3
Effect of exchange rates on cash and cash
equivalents (0.5) 0.4
---------------------------------------------------- ------------------------------- -------------------------------
Closing cash and cash equivalents 37.7 154.3
---------------------------------------------------- ------------------------------- -------------------------------
(1) Employee Benefit Trust and Capita Trust
Fixed asset additions
Six months Six months
to 28 February to 28 February
GBPm 2018 2017
----------------------------- ---------------- ----------------
Technology 57.1 44.9
Warehouse 41.9 18.9
Office fixtures and fit out 8.7 1.3
Total 107.7 65.1
----------------------------- ---------------- ----------------
ASOS continues to invest in warehousing and technology
infrastructure to support future growth ambitions. The majority of
technology spend is related to development of new and existing
platforms, and the TGR programme. Our warehouse spend relates to
the development of our US Hub in Atlanta, Euro hub automation and
some further automation in Barnsley. The office fixtures and fit
out spend related to the new customer care site at Leavesden and
the continued extension and fit out of the Head Office in
Camden.
Consolidated UNAUDITED Statement of Total Comprehensive
Income
Interim Results for the six months to 28 February 2018
Six months Six months Year to
to to
28 February 28 February 31 August
2018 2017 2017 (audited)
(unaudited) (unaudited)
GBPm GBPm GBPm
Revenue 1,158.1 911.5 1,923.6
Cost of sales (588.7) (471.4) (965.3)
------------------------------------ -------------- -------------- -----------------
Gross profit 569.4 440.1 958.3
Distribution expenses (178.5) (140.2) (299.2)
Administrative expenses (361.2) (272.8) (579.5)
Operating profit 29.7 27.1 79.6
Net finance income 0.2 0.2 0.4
Profit before tax 29.9 27.3 80.0
Income tax expense (5.4) (5.4) (15.9)
------------------------------------ -------------- -------------- -----------------
Profit for the period 24.5 21.9 64.1
------------------------------------ -------------- -------------- -----------------
Profit for the period attributable
to owners of the parent
company 24.5 21.9 64.1
------------------------------------ -------------- -------------- -----------------
Net translation movements
offset in reserves 1.1 (0.9) (0.3)
Net fair value gains on
derivative financial assets 67.8 27.4 15.8
Income tax relating to
these items (13.2) (5.6) (3.3)
------------------------------------ -------------- -------------- -----------------
Other comprehensive income
for the period(1) 55.7 20.9 12.2
------------------------------------ -------------- -------------- -----------------
Total comprehensive income
for the period attributable
to owners of the parent
company 80.2 42.8 76.3
------------------------------------ -------------- -------------- -----------------
Earnings per share (Note
4)
Basic 29.4p 26.4p 77.2p
Diluted 29.2p 26.3p 76.6p
------------------------------------ -------------- -------------- -----------------
(1) All items of other comprehensive income may be reclassified
to profit or loss
Consolidated UNAUDITED Statement of Changes in EquitY
Interim Results for the six months to 28 February 2018
Employee
Called Benefit
up share Share Retained Trust Hedging Translation Total
capital premium earnings(1) reserve(2) reserve reserve equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 September
2017 2.9 6.9 327.2 (0.6) (47.5) (1.8) 287.1
Profit for the
period - - 24.5 - - - 24.5
Other comprehensive
income for the
period - - - - 54.9 0.8 55.7
---------- ----------- ------------- ------------ --------- ------------ --------
Total comprehensive
income for the
period - - 24.5 - 54.9 0.8 80.2
Net cash received
on exercise of
shares from EBT(2) - - - 0.9 - - 0.9
Share-based payments
charge - - 4.8 - - - 4.8
Deferred tax
on share options - - 1.0 - - - 1.0
Balance as at
28 February 2018 2.9 6.9 357.5 0.3 7.4 (1.0) 374.0
========== =========== ============= ============ ========= ============ ========
Employee
Called Benefit
up share Share Retained Trust Hedging Translation Total
capital premium earnings(1) reserve(2) reserve reserve equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 September
2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4
Profit for the
period - - 21.9 - - - 21.9
Other comprehensive
income for the
period - - - - 21.8 (0.9) 20.9
---------- ----------- ------------- ------------ --------- ------------ --------
Total comprehensive
income/(loss)
for the period - - 21.9 - 21.8 (0.9) 42.8
Net cash received
on exercise of
shares from EBT(2) - - - 0.6 - - 0.6
Transfer of shares
from EBT(2) on
exercise - - (0.3) 0.3 - - -
Share-based payments
charge - - 3.4 - - - 3.4
Deferred tax
on share options - - 0.6 - - - 0.6
Balance as at
28 February 2017 2.9 6.9 280.3 (1.7) (38.2) (2.4) 247.8
========== =========== ============= ============ ========= ============ ========
(1) Retained earnings includes the share-based payments
reserve
(2) Employee Benefit Trust and Capita Trust
Employee
Called Benefit
up share Share Retained Trust Hedging Translation Total
capital premium earnings(1) reserve(2) reserve reserve equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 September
2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4
Profit for the
year - - 64.1 - - - 64.1
Other comprehensive
income/(loss)
for the year - - - - 12.5 (0.3) 12.2
---------- ----------- ------------- ------------ --------- ------------ --------
Total comprehensive
income/(loss)
for the year - - 64.1 - 12.5 (0.3) 76.3
Net cash received
on exercise of
shares from EBT(2) - - - 1.8 - - 1.8
Transfer of shares
from EBT(2) on
exercise - - (0.2) 0.2 - - -
Share-based payments
charge - - 7.6 - - - 7.6
Deferred tax
on share options - - 1.0 - - - 1.0
Balance as at
31 August 2017 2.9 6.9 327.2 (0.6) (47.5) (1.8) 287.1
========== =========== ============= ============ ========= ============ ========
(1) Retained earnings includes the share-based payments
reserve
(2) Employee Benefit Trust and Capita Trust
Consolidated UNAUDITED Statement of Financial PositioN
Interim Results for the six months to 28 February 2018
At At At
28 February 28 February 31 August
2018 2017 2017 (audited)
(unaudited) (unaudited)
GBPm GBPm GBPm
Non-current assets
Goodwill 1.1 1.1 1.1
Other intangible assets 204.4 142.6 176.9
Property, plant and
equipment 192.3 90.5 137.4
Derivative financial
assets 8.0 - 1.3
Deferred tax asset - 7.9 9.2
------------- ------------- -----------------
405.8 242.1 325.9
------------- ------------- -----------------
Current assets
Inventories 370.0 249.0 323.3
Trade and other receivables 25.2 24.9 28.6
Derivative financial
assets 12.5 - 2.3
Cash and cash equivalents 37.7 154.3 160.3
-------------
445.4 428.2 514.5
------------- ------------- -----------------
Current liabilities
Trade and other payables (457.4) (367.0) (480.7)
Derivative financial
liabilities (12.4) (44.8) (57.7)
Current tax liability (2.3) (6.9) (5.8)
Deferred tax liability (3.9) - -
-------------
(476.0) (418.7) (544.2)
------------- ------------- -----------------
Net current (liabilities)/assets (30.6) 9.5 (29.7)
-------------
Non-current liabilities
Derivative financial
liabilities (1.2) (3.8) (9.1)
-------------
(1.2) (3.8) (9.1)
------------- ------------- -----------------
Net assets 374.0 247.8 287.1
============= ============= =================
Equity attributable
to owners of the parent
Called up share capital 2.9 2.9 2.9
Share premium 6.9 6.9 6.9
Employee Benefit Trust
reserve 0.3 (1.7) (0.6)
Hedging reserve 7.4 (38.2) (47.5)
Translation reserve (1.0) (2.4) (1.8)
Retained earnings 357.5 280.3 327.2
------------- ------------- -----------------
Total equity 374.0 247.8 287.1
============= ============= =================
Consolidated UNAUDITED Statement of Cash Flows
Interim Results for the six months to 28 February 2018
Six months Six months Year to
to to
28 February 28 February 31 August
2018 2017 2017 (audited)
(unaudited) (unaudited)
GBPm GBPm GBPm
Operating profit 29.7 27.1 79.6
------------- ------------- -----------------
Adjusted for:
Depreciation of property,
plant and equipment 7.8 5.7 13.7
Amortisation of other
intangible assets 17.1 15.8 28.6
Loss on disposal of non-current
assets 0.4 0.1 0.5
Investment write off 0.1 - -
(Increase)/decrease in
inventories (46.7) 8.7 (65.6)
Decrease/(increase) in
trade and other receivables 3.5 (10.3) (13.6)
(Decrease)/increase in
trade and other payables (39.3) (6.1) 103.3
Share based payments charge 4.8 3.4 7.6
Other non-cash items 1.3 (1.0) (0.6)
Income tax paid (6.5) (1.2) (7.6)
------------- ------------- -----------------
Net cash (outflow)/inflow
from operating activities (27.8) 42.2 145.9
Investing activities
Payments to acquire other
intangible assets (48.8) (46.1) (89.5)
Payments to acquire property,
plant and equipment (46.6) (16.3) (72.0)
Finance income 0.2 0.2 0.5
Net cash used in investing
activities (95.2) (62.2) (161.0)
Financing activities
Net cash inflow relating
to EBT(1) 0.9 0.6 1.8
Net cash generated in
financing activities 0.9 0.6 1.8
Net decrease in cash and
cash equivalents (122.1) (19.4) (13.3)
============= ============= =================
Opening cash and cash
equivalents 160.3 173.3 173.3
Effect of exchange rates
on cash and cash equivalents (0.5) 0.4 0.3
------------- ------------- -----------------
Closing cash and cash
equivalents 37.7 154.3 160.3
============= ============= =================
(1) Employee Benefit Trust and Capita Trust
Notes to the financial information
Interim Results for the six months to 28 February 2018
1. Preparation of the consolidated financial information
a) General information
ASOS plc ('the Company') and its subsidiaries (together, 'the
Group') is a global fashion retailer. The Group sells products
across the world and has websites targeting the UK, US, Australia,
France, Germany, Spain, Italy and Russia. The Company is a public
limited company which is listed on the Alternative Investment
Market (AIM) and is incorporated and domiciled in the UK. The
address of its registered office is Greater London House, Hampstead
Road, London, NW1 7FB.
The interim financial statements have been reviewed, not
audited, and were approved by the Board of Directors on
9 April 2018.
b) Basis of preparation
The interim financial statements for the six months ended 28
February 2018 have been prepared in accordance with IAS 34,
"Interim Financial Reporting" as adopted by the European Union and
the AIM Rules for Companies. The interim financial statements
should be read in conjunction with the Group's Annual Report and
Accounts for the year ended
31 August 2017, which was prepared in accordance with IFRSs as
adopted by the European Union.
The interim financial statements have been reviewed, not
audited, and do not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. The Annual Report
and Accounts for the year ended 31 August 2017 have 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 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 on pages 3 to 7. The Financial Review on pages
8 to 12 describes the Group's financial position and cash
flows.
Going concern
The Directors have reviewed current performance and cash flow
forecasts, and are satisfied that the Group's forecasts and
projections, taking account of potential changes in trading
performance, show that the Group will be able to operate within the
level of its current facilities for the foreseeable future. The
Directors have therefore continued to adopt the going concern basis
in preparing the Group's financial statements.
Changes to accounting standards
There have been no significant changes under IFRS which have
affected the Group's results in the six months to 28 February 2018.
Changes to IFRS which have been issued, but that are not yet
effective, have been disclosed in the Group's Annual Report and
Accounts for the year ended 31 August 2017.
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, the
interim financial statements have been prepared in accordance with
IAS 34 "Interim Financial Reporting" as adopted by the European
Union and the AIM Rules for Companies, and that the interim
management report includes a fair review of the information
required.
Accounting policies
The interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the year ended 31 August 2017.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to the expected total annual
earnings.
2. Principal risks and uncertainties
The Board considers the principal risks and uncertainties which
could impact the Group over the remaining six months of the
financial year to 31 August 2018 to be unchanged from those set out
in the Annual Report and Accounts for the year ended 31 August
2017, summarised as follows:
- Technological risks, including robustness
of IT systems and infrastructure and IT capacity
and capability failing to keep pace with
business growth and complexity
- Financial risks, including managing exposure
to changes in foreign exchange rates
- Market risks, including disruption to marketing
dynamics as we face increasing competition
from a variety of e-commerce players, UK
business model being insufficiently profitable
on a scalable basis in global markets, or
inadequate digital experience
- Supply chain risks, including disruption
to our business-critical operations caused
by failure on the suppliers' part or from
an over dependency on one supplier or from
warehouse issues or from insufficient warehouse
capacity
- Reputational risks, including (a) our brand
name as a result of failure or inability
to support and protect our brand, trademarks
and domain names, (b) the security of our
customer and business data, either from external
attack or an internal control weakness and
(c) adhering to product quality or ethical
trading standards
- People risks, including preserving our entrepreneurial
culture as we continue to grow
These are set out in detail on pages 28 to 31 of the Group's
Annual Report and Accounts for the year ended 31 August 2017, a
copy of which is available on the Group's website, www.asosplc.com.
Information on financial risk management is also detailed on pages
96 to 97 of the Annual Report.
3. 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 who receive information
on the basis of the Group's operations in key geographical
territories, 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.
Six months to 28 February
2018 (unaudited)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 414.5 149.0 349.1 218.7 1,131.3
Delivery receipts 9.2 3.7 7.1 3.9 23.9
Third party revenues 2.8 0.1 - - 2.9
Total revenue 426.5 152.8 356.2 222.6 1,158.1
Cost of sales (236.2) (63.0) (182.8) (106.7) (588.7)
-------- ------- -------- -------- --------
Gross profit 190.3 89.8 173.4 115.9 569.4
Distribution expenses (50.6) (37.9) (47.8) (42.2) (178.5)
-------- ------- -------- -------- --------
Segment result 139.7 51.9 125.6 73.7 390.9
Administrative expenses (361.2)
--------
Operating profit 29.7
Finance income 0.2
--------
Profit before tax 29.9
========
Six months to 28 February
2017 (unaudited)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 340.8 124.3 248.9 175.2 889.2
Delivery receipts 7.6 2.9 4.9 3.9 19.3
Third party revenues 2.9 0.1 - - 3.0
Total revenue 351.3 127.3 253.8 179.1 911.5
Cost of sales (195.7) (50.4) (138.6) (86.7) (471.4)
-------- ------- -------- -------- --------
Gross profit 155.6 76.9 115.2 92.4 440.1
Distribution expenses (38.7) (33.1) (39.3) (29.1) (140.2)
-------- ------- -------- -------- --------
Segment result 116.9 43.8 75.9 63.3 299.9
Administrative expenses (272.8)
--------
Operating profit 27.1
Finance income 0.2
--------
Profit before tax 27.3
========
Year to 31 August 2017 (audited)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 698.2 261.6 544.1 372.6 1,876.5
Delivery receipts 16.1 6.3 10.8 7.6 40.8
Third party revenues 6.0 0.2 0.1 - 6.3
Total revenue 720.3 268.1 555.0 380.2 1,923.6
Cost of sales (389.7) (103.5) (292.4) (179.7) (965.3)
-------- -------- -------- -------- --------
Gross profit 330.6 164.6 262.6 200.5 958.3
Distribution expenses (81.9) (69.2) (89.8) (58.3) (299.2)
-------- -------- -------- -------- --------
Segment result 248.7 95.4 172.8 142.2 659.1
Administrative expenses (579.5)
--------
Operating profit 79.6
Finance income 0.4
--------
Profit before tax 80.0
========
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. The total amount of non-current assets located in the
EU is GBP65.2m (31 August 2017: GBP46.1m).
4. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of the parent company by the weighted
average number of ordinary shares in issue during the year. Own
shares held by the Employee Benefit Trust and Capita Trust are
eliminated from the weighted average number of ordinary shares.
Diluted 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,
adjusted for the effects of potentially dilutive share options.
Six months Six months Year to
to to
28 February 28 February 31 August
2018 2017 (unaudited) 2017 (audited)
(unaudited)
No. of No. of No. of
shares shares shares
Weighted average share capital
Weighted average shares in
issue for basic earnings per
share 83,243,758 82,986,398 82,996,217
Weighted average effect of
dilutive options 658,025 418,556 712,861
------------- ------------------- -----------------
Weighted average shares in
issue for diluted earnings
per share 83,901,783 83,404,954 83,709,078
============= =================== =================
Earnings (GBPm)
Underlying earnings attributable
to owners of the parent 24.5 21.9 64.1
============== ================ ================
Basic earnings per share: 29.4p 26.4p 77.2p
Diluted earnings per share: 29.2p 26.3p 76.6p
============== ================ ================
5. Capital expenditure and commitments
During the period, the Group capitalised property, plant and
equipment of GBP63.2m and intangible assets of GBP44.5m. Disposals
were GBP0.4m. At the period end capital commitments contracted, but
not provided for by the Group, amounted to GBP51.1m.
6. Reconciliation of cash and cash equivalents
Six months Six months Year
to 28 to 28 to
February February 31 August
2018 (unaudited) 2017 (unaudited) 2017
(audited)
GBPm GBPm GBPm
Net movement in cash and
cash equivalents (122.1) (19.4) (13.3)
Opening cash and cash equivalents 160.3 173.3 173.3
Effect of exchange rates
on cash and cash equivalents (0.5) 0.4 0.3
------------------ ------------------ -----------
Closing cash and cash equivalents 37.7 154.3 160.3
================== ================== ===========
At 28 February 2018 the Group had a revolving credit facility of
GBP20m which included an ancillary overdraft facility. The facility
was subsequently increased to GBP50m and the Group is currently in
advanced stages of securing a revolving credit facility of
GBP150m.
7. Contingent liabilities
From time to time, the Group is subject to various legal
proceedings and claims that arise in the ordinary course of
business, which due to the fast-growing nature of the Group and its
e-commerce base, may concern the Group's brand and trading name or
its product designs. All such cases brought against the Group are
robustly defended and a liability is recorded only when it is
probable that the case will result in a future economic outflow
which can be reliably measured.
At 28 February 2018, there were no other pending claims or
proceedings against the Group which were expected to have a
material adverse effect on its liquidity or operations. The Group
had contingent liabilities of GBP18.1m (H1 2017: GBP6.4m) in
relation to supplier standby letters of credit, rent deposit deeds
and other bank guarantees. The likelihood of a cash outflow in
relation to these contingent liabilities is considered to be
low.
8. Financial instruments
There are no changes to the categories of financial instruments
held by the Group.
Six months Six months Year
to 28 to 28 to
February February 31 August
2018 (unaudited) 2017 (unaudited) 2017
(audited)
GBPm GBPm GBPm
Financial assets
Derivative assets used for
hedging at fair value 20.5 - 3.6
Loans and receivables(1) 49.6 167.0 176.3
Financial liabilities
Derivative liabilities used
for hedging at fair value (13.6) (48.6) (66.8)
Amortised cost(2) (444.8) (360.8) (474.2)
================== ================== ===========
(1) Loans and receivables include trade and other receivables
and cash and cash equivalents, and excludes prepayments
(2) Included in financial liabilities at amortised cost are
trade payables, accruals and other payables
The Group operates internationally and is therefore exposed to
foreign currency transaction risk, primarily on sales denominated
in US dollars, Euros and Australian dollars. The Group's policy is
to mitigate foreign currency transaction exposures where possible
and the Group uses financial instruments in the form of forward
foreign exchange contracts to hedge future highly probable foreign
currency cash flows.
These forward foreign exchange contracts are classified above as
derivative financial assets and are classified as
Level 2 financial instruments under IFRS 13, "Fair Value
Measurement." They have been fair valued at 28 February 2018 with
reference to forward exchange rates that are quoted in an active
market, with the resulting value discounted back to present value.
All forward foreign exchange contracts were assessed to be highly
effective during the period to
28 February 2018 and a net unrealised gain of GBP67.8m (H1 2017:
gain of GBP27.4m) was recognised in equity. All derivative
financial liabilities at 28 February 2018 mature within two years
based on the related contractual arrangements.
9. Related parties
The Group's related party transactions are with the Employee
Benefit Trust, Capita Trust, key management personnel and other
related parties as disclosed in the Group's Annual Report and
Accounts for the year ended 31 August 2017. There have been no
material changes to the Group's related party transactions during
the six months to 28 February 2018.
Independent review report to ASOS Plc
Report on the interim financial statements
Our conclusion
We have reviewed ASOS plc's interim financial statements (the
"interim financial statements") in the interim results of ASOS plc
for the six month period ended 28 February 2018. Based on our
review, nothing has come to our attention that causes us to believe
that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
-- the consolidated unaudited statement of total comprehensive
income for the period ended 28 February 2018;
-- the consolidated unaudited statement of changes in equity for the period then ended;
-- the consolidated unaudited statement of financial position as at 28 February 2018;
-- the consolidated unaudited statement of cash flows for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results
have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the AIM Rules for Companies.
As disclosed in note 1 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim results, including the interim financial statements,
is the responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the interim results in
accordance with the AIM Rules for Companies which require that the
financial information must be presented and prepared in a form
consistent with that which will be adopted in the company's annual
financial statements.
Our responsibility is to express a conclusion on the interim
financial statements in the interim results based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the AIM
Rules for Companies and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
10 April 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFWFWSFASESL
(END) Dow Jones Newswires
April 11, 2018 02:00 ET (06:00 GMT)
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