RNS Number:2842A
ASOS PLC
30 June 2004
FOR RELEASE
30 JUNE 2004
7.00 AM
ASOS plc
("ASOS" or "Group")
Preliminary Results for the 15 months ended 31 March 2004
and
Unaudited Pro Forma Accounts for 12 months to 31st March 2004
Note -Following the change of financial year to 31 March, unaudited pro forma
figures have been produced for the twelve months to 31 March 2004, which the
Board believe more accurately reflect the underlying performance of the Group.
Comparisons made are to the audited accounts for the 12 months to 31 December
2002. Main points below:
*Group sales up 84% to #7.5m
*ASOS.com sales up 98% to #7.0m
*Entertainment Marketing sales #0.5m
*Group profit before tax and amortisation of goodwill - #625,172
*Group profit before tax - #396,838
*ASOS.com registered users - 339,606 as at 28 June 2004
*#1.0m cash at bank
*Fully diluted EPS before tax and goodwill amortisation - 0.9p
*Excellent start to the year, estimated Q1 sales (April - June) for ASOS
.com +83% compared with the period April - June 2003.
*Considerable growth anticipated throughout 2004/5 as new product ranges
kick-in and new marketing initiatives take effect
ASOS plc - contacts
www.asos.com/InvestorRelations.asp
ASOS PLC
Nick Robertson, Chief Executive Tel: 020 7240 7070
John Morgan, Finance Director Tel: 020 7240 7070
Beattie Financial
Brian Coleman-Smith / John Moriarty / Grace Marriner Tel: 020 7398 3300
Seymour Pierce Limited
Mark Percy / Ewan Leggat Tel: 020 7107 8000
Note to Editors
ASOS plc is an Internet Retail and Marketing Services Group, established in June
2000 and admitted to the AIM market in October 2001.
Its principle business is ASOS.com, a leading online Fashion and Beauty
Retailer. A top five online company in the UK clothing and apparel category
(source Hitwise) ASOS.com has over 340,000 registered users and ships 1000 -
1500 orders per day. Its primary customers are Internet savvy 18-34 year olds.
It also owns Entertainment Marketing, a business providing product placement and
sponsorship services to a number of blue chip advertisers.
ASOS plc
Chief Executive's Statement
15 months and 12 months to 31st March 2004
We have made extremely good progress and I am pleased to report that the loss
making days are firmly behind us. This is highlighted when we compare the
profits for the 12 months to 31 March 2004 versus the 15 months to 31 March
2004.
The Internet retail model has clearly proved itself and the business is now
totally committed to this single sales channel.
This strategy is underpinned by independent research. According to Forrester and
IMRG, fashion is the fastest growing sector online. As a leading online clothing
store in the UK we are ideally positioned to take advantage of this trend.
Headlines - 15 months to 31st March 2004
*Group sales #9m
*ASOS.com sales #8.3m
*Entertainment Marketing sales #0.7m
*Group profit before tax and amortisation of goodwill - #543,623
*Group profit before tax - #258,205
*Fully diluted EPS before tax and goodwill amortisation - 0.8p
Unaudited Pro Forma Accounts for 12 months to 31st March 2004
Note - Following the change of financial year to 31 March, unaudited pro forma
figures have been produced for the twelve months to 31 March 2004, which the
Board believe more accurately reflect the underlying performance of the Group.
Comparisons made are to the audited accounts to the 12 months to 31 December
2002.
*Group sales up 84% to #7.5m
*ASOS.com sales up 98% to #7.0m
*Entertainment Marketing sales #0.5m
*Group profit before tax and amortisation of goodwill - #625,172
*Group profit before tax - #396,838
*ASOS.com registered users -339,606 as at 28 June 2004
*#1.0m cash at bank
*Fully diluted EPS before tax and goodwill amortisation - 0.9p
*Excellent start to the year, estimated Q1 sales (April - June) for ASOS
.com +83% on the same period last year.
*Considerable growth anticipated throughout 2004/5 as new product ranges
kick-in and new marketing initiatives take effect
As reported in my statement for year ending December 2002, the year end was
moved from 31 December to 31 March to assist in the preparation of the Group's
accounts specifically in view of stock take requirements at the year end and to
not interfere with Christmas trading.
Fundamentals
Traffic to the site continues to grow with 491,000 unique customers in May 2004
compared with 351,000 for the same month last year. The latest Hitwise survey
shows we are still in the top five online UK clothing and apparel category
retailer, making it to overall fourth place in May 2004.
Since January 2004 our gross margin has strengthened to 49% from 48.5% in the
year ended 31 December 2002. We are committed to pushing this over the 50% mark.
In the short term however, gains from greater order volumes and high margin
categories like jewellery will be off-set by the introduction of lower margin
categories such as footwear and beauty.
The number of registered users has grown to 339,606 as at 28 June 2004 from
299,600 at 31 March 2004. This is significant as it represents the number of
customers we can communicate with each week at no cost by means of our
promotional e-mail.
Our conversion rate (number of orders taken per 100 visitors) has increased
steadily to circa 5% from 4% in the same period last year. We expect to keep
this moving in a positive direction through site developments and range
expansion.
The level of returns has remained fairly static at the 18-19% level. A number of
initiatives have been introduced to keep a firm lid on returns such as better
quality control procedures at the warehouse and more detailed product
information on the website.
Stock levels are healthy with 5-6 weeks cover in the warehouse at any one time.
Product Range
In January 2004 we set a strategy of rapid range expansion in our quest to
become the online 'destination fashion and beauty store for 16-34 year olds'.
This involved putting dedicated resources behind key department areas to
complement our existing womenswear and menswear ranges. I am pleased to inform
you that this strategy is well underway.
In March 2004 we strengthened our menswear team, in April 2004 our accessories
team, in June 2004 our jewellery team and I hope to be in a position to confirm
the appointment of both footwear and beauty buyers by the end of August 2004.
The net effect is that we plan to treble the number of lines available from 500
to 1500 over the next 18 months.
Obviously this strategy has increased the Company's cost base. However, it is
our experience that new buyers will be making a positive contribution to the
business within three months.
Marketing
In June 2004 we strengthened our marketing department with the appointment of a
new Marketing Director. He is charged with overseeing our soft marketing
launches into the US and key EU territories, as well as striking up commercial
partnerships with relevant promotional partners in the UK.
Currently circa 94% of our sales come from the UK and this is where we are
currently focused. However, for little cost, we have started to introduce ASOS
to US and European affiliate networks (where another website promotes ASOS
products in exchange for a small commission on products sold). Approximately
25-30% of our sales in the UK are generated through Affiliates. We will shortly
be accepting payment in Dollars and Euros on the site and we expect this to have
a positive impact on our overseas order volumes.
Recent promotional deals include a tie up with Universal Music and the Girl
Group 'Girls Aloud' and cross promotional deals with HSBC, Amex and Ryan Air.
Logistics
Looking forward, it is clear we will have to move our logistics centre again
during Q1 / 2 2005/6. The process of finding a new warehouse to take us through
to 2010 has begun.
The Market
Recent IMRG research forecast that in the UK one in four retail purchases will
be made online by 2009 against one in twenty four last year. In 2003, it is
estimated that 4.2% of retail sales were made online amounting to #11 billion.
In 2004 online sales are forecast to grow by 54% to #16.9 billion. 27% of
British consumers have now shopped online which is an indication that consumers
accept the web as a safe place to shop
The number of people connected to broadband in the UK has almost doubled in a
year. The Office of National Statistics (ONS) figures show 27% of UK net
connections are broadband, while dial-up is down to 73% from 85% in April last
year.
Entertainment Marketing (EM)
EM's performance was hit over the 15 months to March 2004 by the overall
downturn in advertising spend. Early signs are however that the market seems to
be recovering, and since January 2004 EM has won contracts from Honda, SKY+ and
Tropicana.
The Board is committed to taking full advantage of this recovery and keen to get
EM back into a positive growth cycle. To achieve this, we intend to expand the
range of services it offers to broaden its potential client base and,
ultimately, get it into a position whereby it can provide a number of useful
marketing functions for ASOS.
Our People
On behalf of the board I would like to thank all our team for their commitment
and dedication over the last year. I am confident that as a team we can build
ASOS into a leading on-line fashion brand and continue to meet all the
challenges that this will entail.
Current Trading and Prospects
I am upbeat about our trading outlook for the year ahead. Like for like sales at
ASOS.com are +83% year on year for Q1 (April - June 2004)
Online retail is thriving and fashion, in particular, is experiencing
significant growth. We have laid the foundations to become a significant e-tail
business. With so much untapped potential in terms of both product offer and
potential customer base, I am confident we can continue to generate significant
growth.
Nick Robertson
Chief Executive
30 June 2004
Finance Directors Review
Change of Accounting Date
Following a review of procedures at the end of 2002, the Board decided to change
its accounting period to 31 March 2004. This gives rise to a 15 month audited
set of accounts from 1 January 2003 to 31 March 2004.
Summary of Results for the 15 months to 31 March 2004
In the fifteen months to 31 March 2004 total Group turnover was #8,956,332, of
this total, #8,299,051 is attributable to ASOS.com Limited and #657,281 to
Entertainment Marketing UK Limited.
The resulting profit before tax for the Group was #258,205, which gave a fully
diluted earnings per share of 0.4p. Profit before tax and before goodwill
amortisation was #543,623, which gave a fully diluted earnings per share of
0.8p.
Dividends
The Board has decided not to pay any dividends for the current year. However,
the Board will continue to actively consider future dividend payments.
Taxation
Deferred tax assets of #270,000 (2002: #Nil) have been recognised as the
directors believe this amount is likely to be recovered in the foreseeable
future. This asset arises from the availability of trading losses. This asset
will be recovered when sufficient trading profits have been generated to utilise
the trading losses.
The Group has tax losses of #1,970,367 (2002: #2,501,463) which are available
for offset against future taxable profits.
Cashflow and Balance Sheet
For the 15 month period the Group generated #1,083,877 net cash inflow from
operating activities (12 month period to 31 December 2002: cash outflow
#215,029).
Capital expenditure for the period was #120,501 (2002: #27,744).
During the period the Group raised #215,582 (net of expenses) through a placing
of 6,350,000 ordinary shares. This additional funding was used to increase stock
levels for the Christmas 2003 period.
As a result of the positive cashflow of #1,177,040 for the period, the Group now
has a cash balance of #1,004,118 (2002: Net debt #173,922)
The Group continues to be cash generative in the current financial year and we
are confident that we will continue to generate cash from operating activities
due to increasing profitability and the increased strength of our balance sheet
leading to improved credit terms from our suppliers.
Net current assets increased to #988,178 at the year end ( 31 December 2002:
#4,578 ).
The 12 month trading period from 1April 2003 to 31 March 2004
Comparing the unaudited proforma 12 month period from 1 April 2003 to 31 March
2004 with our previous audited figures for the 12 months from 1 January 2002 to
31 December 2002 shows the following:
TABLE OF HIGHLIGHTS
Unaudited Audited
Proforma 12 Months
12 Months 31 December
31 March 2002
2004
Group Sales #7,540,618 #4,104,123
ASOS Sales #7,004,486 #3,543,177
Group Profit before tax #625,172 (#101,084)
(exc Goodwill Amortisation )
Fully diluted EPS 0.9p (0.2p)
(before tax and Goodwill Amortisation)
Summary of Results
Whilst the comparison is not on a like for like basis, it illustrates how the
Group, and more specifically ASOS.com Limited, has grown. The table shows that
there has been an increase in Group sales of 83.7% and an increase of 97.7% in
ASOS.com Limited's sales when comparing the Unaudited Proforma 12 months to 31
March 2004 with the Audited 12 months to 31 December 2002.
John Morgan
Finance Director
30 June 2004
ASOS plc
Consolidated Profit and Loss Account for the 15 Months to 31st March 2004
15 Month period Proforma Audited
ended 31 March Unaudited 12 Month
2004 12 Month period ended
period ended 31 31 December
March 2004 2002
# # #
Turnover 8,956,332 7,540,618 4,104,123
Cost of sales (4,444,760) (3,710,709) (1,941,355)
---------- ---------- ------------
Gross profit 4,511,572 3,829,909 2,162,768
Admin expenses (3,967,031) (3,207,863) (2,267,908)
Amortisation of
Goodwill (285,418) (228,334) (228,334)
Impairement of
Goodwill - - (1,371,615)
---------- ---------- ------------
Operating Profit/
(Loss) 259,123 393,712 (1,705,089)
Interest Received/
Payable (918) 3,126 4,057
---------- ---------- ------------
Profit/ (Loss) before
tax 258,205 396,838 (1,701,032)
Tax 270,000 270,000 -
---------- ---------- ------------
Profit / (loss) after
tax 528,205 666,838 (1,701,032)
---------- ---------- ------------
Basic EPS 0.8p 1.0p (2.8p)
Fully Diluted EPS 0.8p 1.0p (2.8p)
ASOS plc
Consolidated Balance Sheet at 31st March
15 Months at Proforma Audited
31 March 2004 Unaudited 12 Months at
12 Months at 31 December
31 March 2004 2002
# # #
Fixed assets
Intangible 1,476,816 1,476,816 1,762,234
Tangible 116,182 116,182 70,576
------------ ------------- -------------
1,592,998 1,592,998 1,832,810
------------ ------------- -------------
Current assets
Stocks 521,680 521,680 622,214
Debtors 780,263 780,263 713,055
Cash at bank 1,004,118 1,004,118 67
------------ ------------- -------------
2,306,061 2,306,061 1,335,336
------------ ------------- -------------
Creditors
Within one year (1,317,883) (1,317,883) (1,330,758)
------------ ------------- -------------
Net current assets 988,178 988,178 4,578
------------ ------------- -------------
Total assets less current
liabilities 2,581,176 2,581,176 1,837,388
------------ ------------- -------------
Called up share capital 2,379,292 2,379,292 2,157,042
Share premium account 2,975,358 2,975,358 2,982,025
Profit and loss account (2,773,474) (2,773,474) (3,301,679)
------------ ------------- -------------
Shareholders Funds 2,581,176 2,581,176 1,837,388
(all equity)
------------ ------------- -------------
ASOS plc
Consolidated Cashflow Statement for the 15 months ended 31st March 2004
15 Months to Proforma Audited
31 March Unaudited 12 Months to
2004 12 Months to 31 December
31 March 2002
2004
# # #
Net cash (outflow)/inflow from
operating activities 1,083,877 822,310 (215,029)
Returns on investments and
servicing of finance
Interest received 205 3,126 4,197
Interest paid (1,123) - (140)
Net cashflow from returns on
investments and servicing of
finance (918) 3,126 4,057
Investing activities
Payments to acquire tangible
fixed assets (120,501) (61,300) (27,744)
Net cash (outflow) from
investing activities (120,501) (61,300) (27,744)
NET CASH (OUTFLOW)/INFLOW BEFORE
FINANCING 962,458 764,136 (238,716)
Financing
Net inflow from issue of
ordinary shares 215,582 215,582 -
Repayment of short term loan (1,000) (1,000) (49,000)
Net cash (outflow)/inflow from
financing 214,582 214,582 (49,000)
(INCREASE/(DECREASE) IN CASH 1,177,040 978,718 (287,716)
NOTES TO THE CASHFLOW STATEMENT
Reconciliation of operating profit to net cash inflow from operating activities
15 Months to Proforma Audited
31 March Unaudited 12 Months to
2004 12 Months to 31 December
31 March 2002
2004
# # #
Operating profit / (loss) 259,123 393,712 (1,705,089)
Amortisation charge 285,418 228,334 1,599,948
Depreciation charge 74,895 57,666 56,595
(Increase) / Decrease in stock 100,534 90,405 (456,372)
(Increase) / Decrease in debtors 202,792 (173,974) (467,425)
Increase / (Decrease) in
creditors 161,115 226,167 757,314
Cash (outflow) / inflow from
operating activities 1,083,877 822,310 (215,029)
The financial information contained in the preliminary announcement does not
constitute the company's statutory financial statements. The company's auditors
have issued an unqualified report on the statutory financial statements for the
15 months ended 31 March 2004 and have not made any statement under section 237
(2) or (3) of the Companies Act 1985. A copy of the company's statutory
financial statements will be delivered to the Registrar of Companies shortly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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