TIDMASC
RNS Number : 2631E
ASOS PLC
17 October 2018
17 October 2018
ASOS plc
Global Online Fashion Destination
Final Results for the year to 31 August 2018
Summary financial results
Year to Year to CCY(2)
GBPm(1) 31 August 31 August Change Change
2018 2017
--------------------------- ---------------------- ---------------------- -------------------- -------------------
Group
revenues(3) 2,417.3 1,923.6 26% 24%
Retail sales 2,355.2 1,876.5 26% 24%
UK retail sales 861.3 698.2 23% 23%
International retail
sales 1,493.9 1,178.3 27% 24%
Gross profit 1,237.1 958.3 29%
Retail gross
margin 49.9% 48.6% 130bps
Gross margin 51.2% 49.8% 140bps
Profit before
tax 102.0 80.0 28%
Diluted
earnings per
share 98.0p 76.6p 28%
Cash and cash
equivalents 42.7 160.3 (73%)
--------------------------- ---------------------- ---------------------- -------------------- -------------------
(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 +26% on a reported basis and +24% on a constant currency basis
-- Strong growth across both UK, +23%, and international
territories, +27% (constant currency +24%)
-- Retail gross margin up 130bps
-- PBT up 28% at GBP102m (EBIT margin 4.2%), after taking account of substantial transition costs
-- Continued strong customer engagement: active customers(4)
+19%, average basket value +1%, order frequency(5) +7%
-- Total orders placed 63.2m, +27% year on year
-- US hub phase one operational, Euro hub phase two progressing well
-- Cash balance of GBP43m reflecting working capital and capex
investment, new GBP150m 3-year facility agreed
Guidance and medium term outlook
-- No change to FY19 reported sales and EBIT guidance; c.20-25% and c.4% EBIT margin respectively
-- Medium term reported sales growth guidance also unchanged at
c.20-25% p.a. with a c.4% EBIT margin and capex of GBP230-GBP250m
p.a.
Nick Beighton, CEO, commented:
"This has been another year of substantial progress for ASOS. We
delivered 26% sales growth and 28% profit growth whilst investing
heavily in the long term potential of the business. Our reported
profit increase was achieved despite bearing material transition
costs due to our investment programme. All our financial and
customer key metrics have shown positive growth.
Our guidance remains unchanged both for the current year and the
medium term, despite our record levels of investment.
ASOS is moving fast and is as differentiated as ever. The
potential for our business is huge and we remain focussed on
building ASOS into the world's number one destination for fashion
loving twentysomethings".
(4) Defined as having shopped in the last twelve months as at 31
August
(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, 17 October 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:
ASOS plc Tel: 020 7756
1000
Nick Beighton, Chief Executive Officer
Greg Feehely, Director of Investor Relations
Alison Lygo, Investor Relations Manager
Website: www.asosplc.com/investors
Instinctif Partners Tel: 020 7457
2020
Matthew Smallwood / Justine Warren /
Tom Berger
JPMorgan Cazenove Tel: 020 7742
4000
Michael Wentworth-Stanley / Caroline
Thomlinson / Bill Hutchings
Numis Securities Tel: 020 7260
1000
Alex Ham / Luke Bordewich / Tom Ballard
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
all the freshest styles complemented by exclusive content, making
ASOS.com the hub of a thriving fashion community and giving our
audience the confidence to be whoever they want to be. ASOS sells
over 87,000 branded and ASOS Brand products through localised app
and mobile/desktop web experiences, delivering from fulfilment
centres in the UK, US and Europe. ASOS curates a mix of our
in-house designed labels, ASOS DESIGN, ASOS EDITION, ASOS WHITE and
ASOS 4505, with global and local brands sold through our own
channels to deliver a locally relevant offer. Our ground-breaking
propositions help bring our amazing products to almost 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 eight languages, using an ever
greater number of different payment methods, with hundreds of local
deliveries and returns options from pick up and drop off networks
to Next-Day Delivery. We aim to give all our global customers a
truly frictionless experience.
ASOS's websites attracted 157.2m visits during August 2018
(August 2017: 135.7m) and as at 31 August 2018 had 18.4m active
customers(1) (31 August 2017: 15.4m), of which 6.0m were located in
the UK and 12.4m were located in international territories (31
August 2017: 5.2m in the UK and 10.2m internationally).
(1) Defined as having shopped in the last twelve months as at 31
August
ASOS plc ("the Group")
Global Online Fashion Destination
Final Results for the year to 31 August 2018
Overview
ASOS again reports a strong trading performance for the twelve
months to 31 August 2018 during a record year of investment for us.
The Group delivered retail sales growth of 26% to GBP2,355.2m
(2017: GBP1,876.5m), following acceleration in the final period to
+29%. Reported profit before tax grew by 28% to GBP102.0m (2017:
GBP80.0m). Retail gross margin increased by 130bps to 49.9% (2017:
48.6%).
This is our third consecutive year of sales growth comfortably
in excess of 20%, with revenues having more than doubled over the
same period. In October 2014 we set an ambition to grow to GBP2.5bn
of annual revenues by FY20 and we will achieve this level nearly
two years early. At the same time EBIT margins have remained stable
despite significant investment across both our platforms and
logistical infrastructure, the benefits of which have yet to be
fully realised; a financial discipline that has served us well and
that we will continue to follow.
To enable better understanding of the financial dynamics at play
during this period of high investment we highlight that Group
reported PBT of GBP102.0m is after (i) our ongoing non-cash share
based payment charge of GBP8.9m (2017: GBP7.6m), (ii) an impairment
of our recently closed A-List loyalty scheme of GBP2.7m (2017:
GBPnil) and (iii) our best estimate of facilities transition costs
of c.GBP25m (2017: c.GBP11m) largely relating to our new Euro and
US distribution hubs.
In terms of our geographical retail sales performance, the UK
had an outstanding year, all the more pleasing given the widely
reported difficult trading backdrop; delivering full year sales
growth of 23%, accelerating as the year progressed, and
representing a further demonstrable market share gain in our 18(th)
year of operation. UK active customers grew by 15% accompanied by
an impressive 10% increase in average purchase frequency. Post
year-end, and after careful consideration, we decided to close our
UK loyalty programme, A-List. Through A-List we learnt much about
what customers love about ASOS and how we deliver it. We now
believe the time is right to evolve our loyalty offering to be more
global and give focus to our Premier Delivery option, which
customers have told us they really value.
EU retail sales grew 28% in constant currency, another strong
performance notwithstanding the fact that we managed the sales
growth in this territory in H2 to both protect profitability and
short term capacity against the backdrop of continuing investment
in our Euro hub distribution centre to improve its efficiency
levels closer to our UK Hub in Barnsley. The efficiency of this
facility will improve significantly as we exit the current
financial year. Within the EU region we saw a further growth in
active customers of 25% to 7m, 1m more than in our home market.
Within the US, constant currency sales growth was 25% alongside
a 19% increase in active customers. Our main focus in this region
during the financial period was the successful completion of phase
1 of our new US hub in Atlanta which will enable us to improve our
US customer proposition at the same time as accessing future
delivery cost savings.
Finally, ROW sales grew 18% in constant currency as active
customers grew to 2.8m, up 17% with particularly pleasing
performances in Russia and Israel and a slightly more challenging
backdrop in Australia.
As noted earlier, our substantial multi-year investment
programme continues at pace; these investments, chiefly across
warehousing and technology, will facilitate our growth as we now
focus on the substantial further opportunity ahead. We have
maintained capex guidance at GBP230-250m and, as previously guided,
capex as a percentage of sales will fall steadily going
forward.
As previously guided, the group was free cash flow negative in
FY18 and we anticipate this continuing into the current financial
year as we invest a similar amount of capital expenditure. Year end
cash balance was GBP42.7m. During the period we successfully
renegotiated our banking facilities and have finalised a 3 year
GBP150m revolving credit facility providing more than sufficient
financial flexibility during this period of heavy investment.
On 1 October we launched our new venture brand, Collusion. This
brand has been over 12 months in the making and represents
something new for ASOS, rethinking fashion categorisation and
targeting a Gen Z customer with this gender-fluid, affordable
label. The collection has initially been designed in collaboration
with six young influencers, each with their own online voice and
diverse followings, resulting in a collection with roots in
inclusivity and experimentation. The initial customer response has
been very encouraging.
In addition to Collusion, we saw further restless evolution of
our product as we refreshed and strengthened our retail offer
during the year. Highlights included the successful launch of ASOS
4505, relaunch of Face + Body, including strategic partnerships
with Estee Lauder and L'Oreal, simplification of the brand
architecture, further exclusive collaborations and the addition of
300 new brands to site, whilst editing out a similar number.
Our tech capability continues to go from strength to strength
with its improving velocity, demonstrated by the 2,900 tech
releases during the year vs 1,300 in the prior year. Improvements
across tech included new sites, new languages, improved
recommendations algorithms and our first meaningful move into
AI-driven conversational interfaces.
Overall it was another successful year for us, the pace at which
we operate continues to accelerate and our increasing agility is
allowing us to navigate well a rapidly evolving global retail
environment. Both our strategy and our financial guidance remain
unchanged, the balance between sales growth and profitability
remains optimal and we continue to look to the future with
confidence.
Our Global Opportunity
We continue to see considerable opportunity across our key
markets. The global apparel market continues to undergo significant
channel shift, with growth in the online apparel market
outstripping growth in the overall market. Over this time ASOS has
continued to grow faster than this rate of channel shift and
consequently grow market share. Online penetration will continue to
increase, stepping on 8-10% globally(1) by 2023, and we believe
ASOS is well placed to capitalise on this secular shift in customer
behaviour.
UK EU(2) US RoW(3)
Apparel market size 2018 GBP48.1bn GBP287.9bn GBP303.7bn GBP668.7bn
Apparel market CAGR 2014-18 2% 5% 9% 9%
Online apparel market size 2018 GBP11.6bn GBP46.0bn GBP63.2bn GBP101.3bn
Online apparel market CAGR 2014-18 12% 19% 19% 27%
ASOS retail sales GBP861m GBP724m GBP312m GBP369m
ASOS 4 year CAGR 23% 38% 36% 29%
ASOS market share 7.4% 1.6% 0.5% 0.4%
Forecast apparel market CAGR
2018-23 2% 4% 4% 8%
Forecast online apparel market
CAGR 2018-23 8% 13% 11% 19%
Online penetration 2018 24% 16% 21% 15%
Online penetration forecast
2023 32% 25% 29% 25%
(1) Source: Global Data and ASOS estimates (2) Data for 22
European countries as available through Global Data (3) Data for 25
RoW countries as available through Global Data
Outside our home market where we continue to grow market share,
our current market share offers substantial future growth
opportunities.
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 19%
year-on-year; average order frequency improved by 7%; average
basket value continued to increase by 1%, for the fifth consecutive
year, alongside a strong 20bps improvement in conversion. Active
customers are now at 18.4m, representing a 19% increase year on
year. We continued to drive engagement with the global student
community; as a result student customers increased by 31% year on
year.
We continued with our brand building efforts with a focus on our
ASOS Design products, as well as joint marketing with our strategic
brand partners to support key categories such as Face + Body and
Activewear. Additionally, we saw further collaborations with causes
like GLAAD and the Help Refugees charity, with intention to support
meaningful change.
Engagement through the most relevant social channels remains a
key part of our customer-led content strategy. ASOS were early
adopters of Instagram Stories and have seen fantastic engagement
through this content format. Our stories were viewed 244 million
times during the year, whilst social media followers were up 13%
globally to 22.7million. We progressed with Instagram shopping,
working in collaboration with Instagram to launch a geo-targeted
shopping feed. ASOS were the first brand to have successfully
launched in multiple currencies having worked alongside Instagram
to overcome the currency restriction for shopping.
Sustainability remains a key focus and an integral part of the
ASOS Purpose. We are therefore firmly committed to achieving
ambitious improvement targets. ASOS has publicly committed to
training 100% of relevant design and product teams on circular
design best practice by 2020. Progress has started already, as June
saw the training on circular design commence in collaboration with
London College of Fashion's Centre of Sustainable Fashion.
This year also saw ASOS co-host an assembly with Baroness Lola
Young on Modern Slavery, at the House of Lords. This event was
attended by many of our third-party brands and industry colleagues
and focused on identifying shared risks before building action
plans to combat them.
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.
Our commitment to inclusive fashion runs through the business,
from our 'playful' approach to Face + Body, celebrating diversity,
to our growth in inclusive sizing and most recently the launch of
our newest label, Collusion. Inclusive fits were up 37% during the
second half as our offering across womenswear and menswear
continued to expand into new product categories and fits.
This year saw the introduction of c.300 new brands as we
continue to focus on newness and the most exciting brands for our
fashion loving 20-something customers. Within this were many key
launches to enhance our Face + Body offer, most notably MAC,
Clinique and Too Faced and more recently our first launch of
fragrance with DKNY.
Each week saw c.5,000 new items launch with around 87,000
products in stock at any one point in time. The ASOS Design brand
continues to account for almost 40% of sales which, combined with
exclusive collaborations with third party brands, leads to c.50% of
product being exclusive to ASOS.
ASOS continued to be at the forefront with design and capture of
key trends. Last season ASOS Design were first to market with one
of the year's key pieces, the button through dress. Over half a
million ASOS Design dresses were designed and sold in varying
fabrics and prints, including linen and florals. Animal print was
also a standout trend ASOS captured, with around 2,000 options
merchandised and selling 1.3 million units across both menswear and
womenswear.
August saw the launch of The Simpsons x ASOS DESIGN
collaboration, customer feedback was great and the range attracted
media coverage globally. The range included 50 options across
menswear and womenswear and over a third of the collection sold out
in the first week.
SS18 saw the first launch for Made in Kenya on menswear, this
range achieved record sell through and was well received by the
media, with Vogue describing it as 'the definition of Cultural
Appreciation'. This was the first Made in Kenya range designed with
collaborators: Kenyan Bloggers and Streetstyle duo Too Many
Siblings, Beats 1 DJ Julie Adenuda and Model & Designer Leomie
Anderson, which marked another step-on in the evolution of this
collection.
The second year of our Fashion Discovery competition saw over
1,000 entries competing for a GBP50,000 investment, one-to-one
mentoring and stocking on ASOS. This year saw three winners: LYPH
with a focus on playful, unisex cuts; Wesley Harriott showing
striking silhouettes and multifunctional fashion; and the People's
choice winner, Desree Akorahson, a bold and fun 60s inspired brand.
Collections from the winners will be stocked on ASOS in 2019.
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.
We had another very successful year driving technology change
and innovation. In total we made over 2,900 releases (FY17: 1,300)
to our digital platforms demonstrating the flexibility and pace of
change being delivered. Many of these releases were delivering new
customer features and changes to the shopping experience.
Alongside ongoing design improvements to our apps and a full
refresh of navigation, we extended visual search (Style match) to
international customers and made major changes to our
recommendations algorithms. This significantly improved the rich
product recommendations we serve to customers, and improved
personalisation on homepages. We also further improved page
download speeds and will continue to enhance these into the new
year.
One of the most significant developments this year has been to
our global platform to enable localisation as part of our
international growth strategy. The first half saw the release of
our 'Rest of World' and 'Rest of Europe' sites providing the next
step in localising in 200 markets for those customers outside our
largest markets. During the second half, new foreign language sites
were released for the Netherlands and Sweden. These four new
localised sites allow us to increasingly tailor the experience for
these specific markets, giving different content, visual
merchandising and price zones.
Further to this, we tailored the currencies available to each
country site, and several new currencies will be released early in
the new financial year. This year saw the launch of a number of new
payment methods including Googlepay, Apple Pay international
extensions and 'Try Before You Buy' for the UK. We have also made
significant development progress on the next few locally relevant
payment options for release early in the new year (including
Afterpay and Yandex).
Finally, within localisation, we have improved our push
notifications and on-site contextual messaging software which is
used to talk to customers. This included the ability to target
specific onsite messages at different states within the US, Russia
and Australia.
Significant investment in our data science and analytics
platforms continued during the year. These platforms have powered
the new recommendations algorithms and our conversational interface
platform. The conversational interface platform enables
understanding of and response to customer voice or text commands
for both product discovery and customer care queries. Our initial
exploration into the world of 'Conversational Interfaces' saw the
launch of Enki, a new, one on one way to interact with ASOS that is
designed to help customers find products they love in a fast,
intuitive and fun way. Enki currently provides customers with
personalised recommendations; the next phase will allow customers
to use an assistive search experience within Enki, for example to
help them find the perfect pair of jeans. The investment in new
data capabilities and optimisation algorithms will continue in the
next year.
Following a successful pilot in the first half, a new returns
experience was rolled out to 18 countries globally in the second
half of the year. This feature is integrated within 'My Account'
and improves the returns experience by allowing sight and status
tracking of returned orders as well as early payment of
refunds.
From a global supply chain perspective, good progress was made
with the technology to enhance our global supply chain including:
facilitating the opening of the new US fulfilment centre,
improvements in our carrier management options and improvement in
the software we use to manage our customer contacts.
Within warehousing, the Euro hub phase two extension is
progressing to plan. Within the year, handover of the site was
completed along with delivery and commencement of installation for
the automated storage system. This automated storage system is now
over 95% complete with testing and commissioning well underway.
Good progress is also being made on the new warehouse management
system which will be installed this year.
FY18 also saw the build and commission of our new 1 million
square foot warehouse in Atlanta. The facility is now live for both
inbound and outbound despatch, with plans to ramp towards 100%
local fulfilment for the US market over the coming year. This
facility opened with a greater level of mechanisation than we saw
in either of our other warehouses, notably conveyers for
transporting product to pickers. Nevertheless, this facility will
operate as a manual operation during the coming financial year
before automation benefits begin to accrue from FY20 onwards.
The capacity increase project at Barnsley completed on schedule,
which added an additional 2 million units of stockholding
capability to our UK hub. This capacity has also been supplemented
with the opening of a multi-use facility at Doncaster. In addition
to providing 3 million units of incremental stockholding capacity,
this facility will also undertake returns processing, giving
increased capacity and greater flexibility through peak trading and
enhancing our returns processing capability longer term.
ASOS made further improvements to the delivery proposition
globally, with the launch of new delivery methods, promise
improvements, extended cut-off times and improved coverage across
the world. Highlights include the launch of same day delivery into
two more European cities, Birmingham and Berlin, and the extension
of next day cut-off times for EU orders to 4pm. Click & Collect
was launched into Russia, with over 3,000 locations, and extended
in Finland, Sweden and Poland.
Progress continued at pace on our space and facilities
transformation within GLH, our London based head office. In
December our people team were the first to experience the 'new GLH'
as they moved into their finished space. The remainder of the year
saw further teams follow in addition to the launch of our new
learning and development 'Academy' space and 'ASOS Underground',
our new gym and wellbeing facilities. FY18 was the peak year of
investment for our space transformation project, with the majority
of the work due to complete by the end of FY19.
Our People
At the end of August 2018, ASOS employed 4,386 people, year on
year growth of 23%, 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
Atlanta.
We are passionate about supporting the wellbeing of our ASOS
family and ensuring that we have the right strategies, initiatives
and policies in place. Our big focus for the year was mental health
and we launched our "Get Stuck In" campaign which was all about
raising awareness around mental health issues.
Amongst our biggest stand out achievements in the last year is
the fact that we officially became the No.1 company to work for in
the UK according to the LinkedIn Top Companies 2018 List.
This year also saw the successful launch of Workday, our new HR
system, giving ASOS leading edge, fully mobile-enabled technology
to manage all people-related activity.
On 3 July ASOS was delighted to announce that Adam Crozier would
be joining the Board as Chairman at the AGM on 29 November 2018 as
existing Chair, Brian McBride, announced his intention to step down
after six years with the company.
The search for a new CFO is progressing well and we would hope
to make an announcement shortly. The strength and depth of our
finance team has enabled the business to operate seamlessly in the
interim.
Investment
ASOS's investment across technology and logistics continues to
deliver great results and is key to sustaining the strong growth
momentum within the business.
We invested GBP242m of capex in the year, across technology and
transformation programmes (c.50% of total capex) and the balance in
physical infrastructure across supply chain infrastructure as well
as the ongoing investment in our head office.
Investment in infrastructure included ongoing automation of Euro
Hub, the development of the US Hub Phase 1 in Atlanta, as well as
improvements to the head office in Camden and our customer care
site in Leavesden. Within Tech we deployed over 2,900 releases and
our transformational programmes continued at pace with the new
Finance and People Experience systems going live in the year. This
investment is key in enabling the strong growth momentum in the
business. Our investment in TGR (our new retail planning
merchandising system) continues, which will allow us to plan and
range product by fulfilment centre, improve our ability to
differentially price across global markets, and help us optimise
product clearance costs.
Since the majority of capex spend mainly comprised of multi-year
programme investments, at year end we held a high level of assets
under construction of GBP190m, as many of our planned investments
go live in FY19.
As we discussed at the half year, FY19 and FY20 capital
expenditures will be at a broadly similar level to this year. This
spend will include the completion of TGR, further Euro Hub
automation, the automation of the US Hub, the remaining spend on
our head office as well as ongoing spend on digital platforms.
Despite the significant investment above, we were free cash flow
positive for the second half as cash increased to GBP42.7m from
GBP37.7m at the end of February. Overall, we currently expect FY19
to be the last year of negative free cash flow before we return to
being free cash flow positive in FY20. Our new three year GBP150m
revolving credit facility provides more than sufficient financial
flexibility during this period of heavy investment.
Outlook
We remain in a period of high investment, confidently pursuing
the considerable opportunity we see ahead of us. We also remain
equally focussed on our core financial disciplines, reflected in
our unchanged sales and EBIT margin guidance both for the current
year and into the medium-term, after incorporating significant
ongoing warehouse transition costs and the phased transition to US
import duty.
By concentrating on successfully executing our investments
whilst retaining our unwavering focus on continuing to deliver the
great product and customer experience that defines and
differentiates us, we are building ASOS into the world's number one
destination for fashion loving 20-somethings.
Nick Beighton
Chief Executive Officer
Financial review
Revenue
Year to 31 August 2018 Group International
GBPm total UK EU US RoW total
-------- ------ ------ ------ ------ --------------
Retail sales 2,355.2 861.3 739.1 311.6 443.2 1,493.9
Growth 26% 23% 36% 19% 19% 27%
Growth at constant exchange
rate 24% 23% 28% 25% 18% 24%
Delivery receipts 54.4 22.3 15.3 9.0 7.8 32.1
Growth 33% 39% 42% 43% 3% 30%
Third party revenues 7.7 7.4 0.1 0.2 - 0.3
Growth 22% 23% - - - -
Total revenues 2,417.3 891.0 754.5 320.8 451.0 1,526.3
Growth 26% 24% 36% 20% 19% 27%
Growth at constant exchange
rate 24% 24% 28% 26% 18% 24%
-------- ------ ------ ------ ------ --------------
The Group generated retail sales growth of 26% during the year,
with UK growth of 23% and international growth of 27% (24% constant
currency). International retail sales accounted for 63% (2017: 63%)
of total retail sales.
UK retail sales grew by 23% despite a challenging market, aided
by an increase in order frequency from the existing customer base.
ASOS retained its first place position for unique visitors to
apparel retailers in the 15-34 age range (Comscore, August
2018).
EU retail sales grew by 36% (28% in constant currency) aided by
further proposition improvements; ASOS Premier launching in new
countries (Austria, Ireland, the Netherlands, Belgium, Denmark and
Sweden); local websites launching in Sweden and the Netherlands;
and a new Rest of Europe website.
US retail sales grew by 19% (25% in constant currency) driven by
average basket value and conversion improvements. The USD became a
headwind during the year 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.
RoW retail sales grew by 19% (18% constant currency), augmented
by an enhanced customer proposition in certain territories.
Exceptional retail growth last year has led to 71% growth over the
last two years (60% constant currency).
Delivery receipts increased by 33%, more than retail sales
growth, as customers took advantage of paid faster shipping options
such as next day delivery. The number of premier customers
increased by 53% to 1.3m.
Customer engagement
ASOS has seen a significant increase in active customers(1) ,
finishing the financial year with 18.4m, up 19% compared to last
year. Engaging content and investments in the technology platform
have helped drive this growth as well as a 19% increase in the
number of visits. The compelling nature of the ASOS proposition
drove increases in orders by 27%, average order frequency(2) by 7%
and average basket value by 1%; marking the fifth consecutive year
of growth in average basket value.
Year to 31 Year to 31 Change
August 2018 August 2017
--------------------------------- ------------- ------------- --------
Active customers(1) (m) 18.4 15.4 19%
Average basket value (including
VAT) GBP73.00 GBP72.24 1%
Average units per basket 3.01 2.87 5%
Average selling price per unit
(including VAT) GBP24.29 GBP25.16 (4%)
Average order frequency(2) 3.43 3.22 7%
Total orders (m) 63.2 49.6 27%
Total visits (m) 1,992.8 1,669.0 19%
Conversion(3) 3.2% 3.0% +20bps
Mobile device visits 77.0% 70.3% +670bps
Net Promoter Score(4) -3 +2
--------------------------------- ------------- ------------- --------
(1) Defined as having shopped during the last twelve months as
at 31 August
(2) Calculated as last twelve months' total orders divided by
active customers
(3) Calculated as total orders divided by total visits
(4) Net Promoter Score is based on a customer pulse survey and
this represents the movement in the average score in the
twelve-month period ended 31 August
Gross profitability
Year to 31 August
2018 Group International
total UK EU US RoW Total
-------- ------- --------- ------- --------------
Gross profit (GBPm) 1,237.1 411.1 390.9 192.9 242.2 826.0
Growth 29% 24% 49% 17% 21% 32%
Retail gross margin 49.9% 44.3% 50.8% 59.0% 52.9% 53.1%
Growth 130bps 10bps 450bps (140bps) 110bps 200bps
Gross margin 51.2% 46.1% 51.8% 60.1% 53.7% 54.1%
Growth 140bps 20bps 450bps (130bps) 100bps 190bps
-------- ------ ------- --------- ------- --------------
Group retail gross margin increased by 130bps to 49.9% compared
to last year (2017: 48.6%) due to a positive net FX position and
improved buying margin. Gross margin (including delivery receipts
and third-party revenues) increased by 140bps to 51.2% (2017:
49.8%) as paid faster shipping options became more appealing to
customers.
Operating expenses
The Group increased its investment in operating resources by 29%
to GBP1,135.2m, with the total operating costs to revenue ratio
increasing by 130bps to 47.0% (2017: 45.7%).
Year to 31 Year to
August 2018 31 August
GBPm % of sales 2017 % of sales Change
Distribution costs (380.8) 15.8% (299.2) 15.6% (27%)
Payroll and staff costs(1) (193.7) 8.0% (162.8) 8.5% (19%)
Warehousing (241.1) 10.0% (168.5) 8.8% (43%)
Marketing (106.7) 4.4% (86.8) 4.5% (23%)
Production (7.0) 0.3% (6.8) 0.3% (3%)
Technology costs (43.8) 1.8% (35.1) 1.8% (25%)
Other operating costs (107.5) 4.4% (77.2) 4.0% (39%)
Depreciation and amortisation (54.6) 2.3% (42.3) 2.2% (29%)
------------------------------- ------------- ----------- ----------- ----------- -------
Total operating costs (1,135.2) 47.0% (878.7) 45.7% (29%)
------------------------------- ------------- ----------- ----------- ----------- -------
(1) Inclusive of non-cash share-based payment charges
Distribution costs increased by 20bps to 15.8% of revenue,
driven by increased mix into more expensive delivery propositions
and territories, partly offset by improved standard delivery
rates.
Payroll and staff costs decreased by 50bps to 8.0% of sales as a
result of costs growing at a lower rate than sales. Headcount has
increased 23% (2018: 4,386; 2017: 3,579). Non-cash share-based
payment charges amounted to GBP8.9m (2017: GBP7.6m), relating to a
new grant under our new Long-Term Incentive Scheme during the year
and a higher uptake in our Save As You Earn scheme.
Warehousing costs increased by 120bps to 10.0% of revenue due to
higher transitional costs as we build out our supply chain
capacity, with increased fulfilment mix from Euro hub which is
still a manual operation and one-off set-up costs for the new US
Atlanta fulfilment centre.
Marketing costs decreased by 10bps to 4.4% of sales as a result
of digital marketing efficiencies.
Technology costs remained flat at 1.8% of revenue.
Other operating costs increased by 40bps to 4.4% of revenue as
we expanded our London base and incurred transitional costs during
the refurbishment. We also opened a new customer care centre at the
start of the year.
Depreciation and amortisation increased by 10bps to 2.3% of
revenue as key transformational projects which we invested in this
year such as US Atlanta hub, Euro hub automation, and our new
buying and merchandising system (TGR) did not significantly impact
depreciation in year.
Income statement
The Group generated profit before tax of GBP102.0m, up 28%
compared to last year, higher than sales growth due to gross margin
improvement of 140bps, offset by a 130bps investment in operating
costs.
Year to Year to
GBPm 31 August 2018 31 August 2017
------------------------- ---------------- ----------------
Revenue 2,417.3 1,923.6
Cost of sales (1,180.2) (965.3)
------------------------- ---------------- ----------------
Gross profit 1,237.1 958.3
Distribution expenses (380.8) (299.2)
Administrative expenses (754.4) (579.5)
Operating profit 101.9 79.6
Net finance income 0.1 0.4
Profit before tax 102.0 80.0
Income tax expense (19.6) (15.9)
------------------------- ---------------- ----------------
Profit after tax 82.4 64.1
------------------------- ---------------- ----------------
Effective tax rate 19.2% 19.9%
------------------------- ---------------- ----------------
Taxation
The effective tax rate decreased by 70bps to 19.2% (2017:
19.9%). This arose mainly from the effect of the substantively
enacted corporation tax rate being reduced to 17% after 1 April
2020 on the deferred tax on accelerated capital allowances and on
assets qualifying for 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 28% to 98.9p
and 98.0p respectively (2017: 77.2p and 76.6p). This was driven by
the increase in profit before tax during the year.
Statement of financial position
The Group's financial position remains strong with movements
reflecting the current accelerated level of investment underway.
The increase in net assets of GBP151.7m to GBP438.8m during the
year (31 August 2017: GBP287.1m) was largely seen in higher capital
expenditure and an increase in inventory. As capital expenditure
and inventory spend exceeded EBITDA during the year, the cash
balance decreased to GBP42.7m (detailed more fully on page 13).
There was an improvement of GBP70.4m 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 GBP17.4m 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
31 August 2018. The summary statement of financial position is
shown below:
At At
GBPm 31 August 2018 31 August 2017
------------------------------------------- ---------------- ----------------
Goodwill and other intangible assets 258.0 178.0
Property, plant and equipment 241.6 137.4
Derivative financial assets 3.8 1.3
Deferred tax asset - 9.2
------------------------------------------- ---------------- ----------------
Non-current assets 503.4 325.9
------------------------------------------- ---------------- ----------------
Inventories 407.6 323.3
Net current payables (507.1) (452.1)
Cash and cash equivalents 42.7 160.3
Derivative financial assets/(liabilities) 3.4 (64.5)
Current tax liability (3.0) (5.8)
Deferred tax liability (8.2) -
Net assets 438.8 287.1
------------------------------------------- ---------------- ----------------
Statement of cash flows
The Group's cash balance decreased by GBP117.6m to GBP42.7m
during the year (31 August 2017: GBP160.3m) as a result of capital
expenditure cash outflow of GBP213.0m and a movement in working
capital of GBP62.4m, partly offset by EBITDA of GBP156.5m. The year
on year rise in working capital of GBP62.4m is mainly driven by
inventory which has grown in line with sales to ensure we have
availability to meet demand.
GBPm Year to 31 August 2018 Year to 31 August 2017
------------------------------------------------------- ----------------------- -----------------------
Operating profit 101.9 79.6
Depreciation and amortisation 54.6 42.3
Losses on disposal of assets 0.8 0.5
Fixed asset impairment 2.7 -
Working capital (62.4) 24.1
Share-based payments charge 8.9 7.6
Other non-cash items 0.5 (0.6)
Tax paid (13.1) (7.6)
Cash inflow from operating activities 93.9 145.9
Capital expenditure (213.0) (161.5)
Net finance income received 0.1 0.5
Net cash inflow relating to Employee Benefit Trust(1) 1.7 1.8
Total cash outflow (117.3) (13.3)
Opening cash and cash equivalents 160.3 173.3
Effect of exchange rates on cash and cash equivalents (0.3) 0.3
------------------------------------------------------- ----------------------- -----------------------
Closing cash and cash equivalents 42.7 160.3
------------------------------------------------------- ----------------------- -----------------------
(1) Employee Benefit Trust and Link Trust
Fixed asset additions
Year to 31 Year to 31
GBPm August 2018 August 2017
----------------------------- ------------- -------------
Technology 127.9 104.8
Warehouse 87.9 49.5
Office fixtures and fit out 26.6 13.2
Total 242.4 167.5
----------------------------- ------------- -------------
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 Statement of Total Comprehensive Income
For the year to 31 August 2018
Year to 31 August Year to 31
2018 August 2017
GBPm GBPm
Revenue 2,417.3 1,923.6
Cost of sales (1,180.2) (965.3)
---------------------------------------------- ------------------ -------------
Gross profit 1,237.1 958.3
Distribution expenses (380.8) (299.2)
Administrative expenses (754.4) (579.5)
Operating profit 101.9 79.6
Finance income 0.3 0.4
Finance expense (0.2) -
Profit before tax 102.0 80.0
Income tax expense (19.6) (15.9)
---------------------------------------------- ------------------ -------------
Profit for the year 82.4 64.1
---------------------------------------------- ------------------ -------------
Profit for the year attributable to
owners of the parent company 82.4 64.1
---------------------------------------------- ------------------ -------------
Net translation movements offset in
reserves 0.3 (0.3)
Net fair value gains on derivative financial
assets 67.7 15.8
Income tax relating to these items (12.8) (3.3)
---------------------------------------------- ------------------ -------------
Other comprehensive income for the year(1) 55.2 12.2
---------------------------------------------- ------------------ -------------
Total comprehensive income for the year
attributable to owners of the parent
company 137.6 76.3
---------------------------------------------- ------------------ -------------
Earnings per share
Basic 98.9p 77.2p
Diluted 98.0p 76.6p
---------------------------------------------- ------------------ -------------
(1) All items of other comprehensive income will subsequently be
reclassified to profit or loss
Consolidated Statement of Changes in EquitY
For the year to 31 August 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 year - - 82.4 - - - 82.4
Other comprehensive
income for the year - - - - 55.0 0.2 55.2
---------- ----------- ------------- ------------ --------- ------------ --------
Total comprehensive
income for the year - - 82.4 - 55.0 0.2 137.6
Net cash received
on exercise of
shares
from EBT(2) - - - 1.7 - - 1.7
Transfer of shares
from EBT(2) on exercise - - 0.1 (0.1) - - -
Share-based payments
charge - - 10.4 - - - 10.4
Tax relating to
share
option scheme - - 2.0 - - - 2.0
Balance as at 31
August
2018 2.9 6.9 422.1 1.0 7.5 (1.6) 438.8
========== =========== ============= ============ ========= ============ ========
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
Tax relating to
share
option scheme - - 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 Link Trust
Consolidated Statement of Financial PositioN
At 31 August 2018
At At
31 August 31 August
2018 2017
GBPm GBPm
Non-current assets
Goodwill 1.1 1.1
Other intangible assets 256.9 176.9
Property, plant and equipment 241.6 137.4
Derivative financial assets 3.8 1.3
Deferred tax asset - 9.2
----------- -----------
503.4 325.9
----------- -----------
Current assets
Inventories 407.6 323.3
Trade and other receivables 42.6 28.6
Derivative financial assets 10.7 2.3
Cash and cash equivalents 42.7 160.3
503.6 514.5
----------- -----------
Current liabilities
Trade and other payables (549.7) (480.7)
Derivative financial liabilities (5.3) (57.7)
Current tax liability (3.0) (5.8)
(558.0) (544.2)
----------- -----------
Net current liabilities (54.4) (29.7)
Non-current liabilities
Deferred tax liability (8.2) -
Derivative financial liabilities (2.0) (9.1)
(10.2) (9.1)
----------- -----------
Net assets 438.8 287.1
=========== ===========
Equity attributable to owners
of the parent
Called up share capital 2.9 2.9
Share premium 6.9 6.9
Employee Benefit Trust reserve 1.0 (0.6)
Hedging reserve 7.5 (47.5)
Translation reserve (1.6) (1.8)
Retained earnings 422.1 327.2
----------- -----------
Total equity 438.8 287.1
=========== ===========
Consolidated Statement of Cash Flows
For the year to 31 August 2018
Year to Year to 31
31 August 2017
August 2018
GBPm GBPm
Operating profit 101.9 79.6
------------- -------------
Adjusted for:
Depreciation of property, plant and equipment 17.0 13.7
Amortisation of intangible assets 37.6 28.6
Loss on disposal of non-current assets 0.8 0.5
Fixed asset impairment 2.7 -
Increase in inventories (84.3) (65.6)
Increase in trade and other receivables (14.0) (13.6)
Increase in trade and other payables 35.9 103.3
Share based payments charge 8.9 7.6
Other non-cash items 0.5 (0.6)
Income tax paid (13.1) (7.6)
------------- -------------
Net cash generated from operating activities 93.9 145.9
Investing activities
Payments to acquire intangible assets (107.4) (89.5)
Payments to acquire property, plant and
equipment (105.6) (72.0)
Finance income 0.3 0.5
Net cash used in investing activities (212.7) (161.0)
Financing activities
Net cash inflow relating to EBT(1) 1.7 1.8
Finance expense (0.2) -
------------- -------------
Net cash generated in financing activities 1.5 1.8
Net decrease in cash and cash equivalents (117.3) (13.3)
============= =============
Opening cash and cash equivalents 160.3 173.3
Effect of exchange rates on cash and cash
equivalents (0.3) 0.3
------------- -------------
Closing cash and cash equivalents 42.7 160.3
============= =============
(1) Employee Benefit Trust and Link Trust
Notes to the financial information
For the year to 31 August 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, the Netherlands, Russia, and Sweden.
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.
b) Basis of preparation
The condensed consolidated financial information for the year to
31 August 2018 has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards ("IFRS") as adopted for use in the European Union and
with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The accounting policies adopted for the year
to 31 August 2018 are consistent with those adopted and disclosed
in the Group financial statements for the year to 31 August
2017.
The financial information contained within this preliminary
announcement for the years to 31 August 2018 and 31 August 2017
does not comprise statutory financial statements within the meaning
of section 434 of the Companies Act 2006. Statutory accounts for
the year to 31 August 2017 have been filed with the Registrar of
Companies and those for the year to 31 August 2018 will be filed
following the Company's annual general meeting. The auditors'
report on the statutory accounts for each of the years to 31 August
2018 and 31 August 2017 is unqualified, does not draw attention to
any matters by way of emphasis, and does not contain any statement
under section 498 of the Companies Act 2006.
Going concern and viability
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.
The Directors have also assessed the Group's prospects and
viability over a three-year period to 31 August 2021. This
three-year assessment period was selected as it corresponds with
the Board's strategic planning horizon as well as the time period
over which senior management are remunerated via long-term
incentive plans.
In making this assessment, the Directors took account of the
Group's current financial position, annual budget, three-year plan
forecasts and sensitivity testing. The Directors also considered a
number of other factors, including the Group business model, its
strategy, risks and uncertainties and internal control
effectiveness. Whilst the principal risks and uncertainties could
impact future performance, none of them are considered likely,
individually or collectively, to affect the viability of the
business during the three-year assessment period. The Group is
operationally strong with a robust balance sheet and cash position,
and has a track record of delivering profitable and sustainable
growth, which is expected to continue.
Based on this assessment, there is a reasonable expectation that
the Group will continue in operation and meet all its liabilities
as they fall due during the period up to 31 August 2021.
Changes to accounting standards
The accounting policies applied are consistent with those
adopted and disclosed in the Group financial statements for the
year to 31 August 2017. Various new accounting standards and
amendments were issued during the year, none of which have an
impact on the current year.
The following accounting standards are in issue but not yet
effective and have not been adopted by the Group:
-- IFRS 9 'Financial Instruments' replaces IAS 39 'Financial
Instruments Recognition and Measurement'. The standard is effective
for accounting periods beginning on or after 1 January 2018. The
Group has completed an assessment of IFRS 9 and it is expected that
adoption will not have a material impact on the results or
financial position of the Group. The Group will adopt the new
accounting standard during the financial year starting 1 September
2018.
-- IFRS 15 'Revenue from Contracts with Customers' replaces IAS
18 'Revenue'. This standard is effective for accounting periods
beginning on or after 1 January 2018. The Group has completed an
assessment of IFRS 15 and it is expected that adoption will not
have a material impact on the results or financial position of the
Group. The Group will adopt the new accounting standard during the
financial year starting 1 September 2018.
-- IFRS 16 'Leases' is effective for periods beginning on or
after 1 January 2019. Early adoption is permitted if IFRS 15 has
also been adopted. The standard will require lease liabilities and
the right of use assets for leases to be recognised in the
Statement of Financial Position. The Group has completed an
assessment of the impact on the Group of applying IFRS 16. This
assessment indicates that there will be a significant impact,
increasing the value of non-current assets and lease liabilities as
the leases for warehousing and office space are currently accounted
for as operating leases (see Note 21 of the 2018 Annual Report for
the current level of operating lease commitments). Our assessment
indicates that IFRS 16 will have an immaterial impact on the profit
and loss once adopted, however this standard, once implemented,
will impact where certain costs are reported on the income
statement as well as the classification within cash flow. The Group
will adopt the new accounting standard during the financial year
starting 1 September 2019.
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 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.
Year to 31 August 2018
UK EU US RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 861.3 739.1 311.6 443.2 2,355.2
Delivery receipts 22.3 15.3 9.0 7.8 54.4
Third party
revenues 7.4 0.1 0.2 - 7.7
Total revenue 891.0 754.5 320.8 451.0 2,417.3
Cost of sales (479.9) (363.6) (127.9) (208.8) (1,180.2)
---------------- ---------------- ---------------- ---------------- ----------------
Gross profit 411.1 390.9 192.9 242.2 1,237.1
Distribution
expenses (108.0) (104.9) (79.6) (88.3) (380.8)
---------------- ---------------- ---------------- ---------------- ----------------
Segment result 303.1 286.0 113.3 153.9 856.3
Administrative
expenses (754.4)
----------------
Operating profit 101.9
Finance income 0.3
Finance expense (0.2)
----------------
Profit before tax 102.0
================
Year to 31 August 2017
UK EU US RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 698.2 544.1 261.6 372.6 1,876.5
Delivery receipts 16.1 10.8 6.3 7.6 40.8
Third party
revenues 6.0 0.1 0.2 - 6.3
---------------- ---------------- ---------------- ---------------- ----------------
Total revenue 720.3 555.0 268.1 380.2 1,923.6
Cost of sales (389.7) (292.4) (103.5) (179.7) (965.3)
---------------- ---------------- ---------------- ---------------- ----------------
Gross profit 330.6 262.6 164.6 200.5 958.3
Distribution
expenses (81.9) (89.8) (69.2) (58.3) (299.2)
---------------- ---------------- ---------------- ---------------- ----------------
Segment result 248.7 172.8 95.4 142.2 659.1
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
UK is GBP380.8m (2017: GBP267.7m), EU: GBP75.2m (2017: GBP46.1m),
US: GBP42.5m (2017: GBP0.5m) and RoW: GBPnil (2017: GBPnil).
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 Employee Benefit Trust and Link 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 year,
adjusted for the effects of potentially dilutive share options.
Year to Year to
31 August 31
2018 August 2017
No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for
basic earnings per share 83,290,514 82,996,217
Weighted average effect of dilutive
options 781,491 712,861
-------------- --------------
Weighted average shares in issue for
diluted earnings per share 84,072,005 83,709,078
============== ==============
Earnings (GBPm)
Earnings attributable to owners of the parent 82.4 64.1
Earnings per share:
Basic earnings per share 98.9p 77.2p
Diluted earnings per share 98.0p 76.6p
---------------- ----------------
4. Reconciliation of cash and cash equivalents
Year to Year to
31 August 31 August
2018 2017
GBPm GBPm
Net movement in cash and cash equivalents (117.3) (13.3)
Opening cash and cash equivalents 160.3 173.3
Effect of exchange rates on cash
and cash equivalents (0.3) 0.3
----------- -----------
Closing cash and cash equivalents 42.7 160.3
=========== ===========
During the year the Group re-financed its existing GBP20m
Revolving Credit Facility ("RCF"). The Group now has in place a
GBP150m RCF available until May 2021, which was not drawn down at
the year end.
5. 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
ecommerce 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 31 August 2018, there were no 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 GBP20.3m (2017: GBP19.1m) 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.
6. Financial instruments
There are no changes to the categories of financial instruments
held by the Group.
Year to Year to
31 August 31
2018 August 2017
GBPm GBPm
Financial assets
Derivative assets used for hedging at fair
value 14.5 3.6
Loans and receivables(1) 70.8 176.3
Financial liabilities
Derivative liabilities used for hedging at
fair value (7.3) (66.8)
Amortised cost(2) (537.5) (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 and Euros. 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 liabilities and are classified as Level 2
financial instruments under IFRS 13, "Fair Value Measurement." They
have been fair valued at 31 August 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 31 August 2018 and a net unrealised gain of
GBP67.7m (2017: gain of GBP15.8m) was recognised in equity. All
derivative financial liabilities at 31 August 2018 mature within
two years based on the related contractual arrangements.
7. Related parties
The Group's related party transactions are with the Employee
Benefit Trust, Link Trust, key management personnel and other
related parties. There have been no material changes to the Group's
related party transactions during the year to 31 August 2018.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UNRBRWSARAAA
(END) Dow Jones Newswires
October 17, 2018 02:00 ET (06:00 GMT)
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