8th Apr 2021 08:12
(Alliance News) - Online fashion retailer ASOS PLC on Thursday said its first half sales rose by almost a quarter, as stay-at-home measures shut its high street counterparts and caused a boom in e-commerce.
In addition, ASOS said its integration of Arcadia brands, was "progressing to plan".
In February, ASOS revealed it had bought four brands from Philip Green's fallen retail empire Arcadia, including UK high street staples Topshop and Topman. Included in the GBP265 million deal were Miss Selfridge and HIIT as well.
What's more, the company said it is now debt-free and it has boosted its annual outlook on the back of the bumper first half. Its expectations for the second half are unchanged, however, with the retailer "retaining caution" due to Covid-19 uncertainty.
In the six months to February 28, revenue rose 24% to GBP1.98 billion from GBP1.60 billion a year earlier. The measure includes other items such as delivery receipts and third party revenue.
Retail sales alone were 24% higher at GBP1.92 billion from GBP1.55 billion.
Its profit also surged. ASOS recorded a pretax profit of GBP106.4 million, from GBP30.1 million a year earlier. Adjusted pretax profit, so not including one-off costs related to its Topshop deal, came in at GBP112.9 million.
It was a record adjusted pretax profit, with the figure being helped by a "net Covid-19 benefit" of GBP48.5 million.
ASOS added that one-off acquisition and integration costs are now expected to amount to about GBP10 million, halved from GBP20 million.
There was more good news in the AIM-listed firm's balance sheet. It swung to a net cash position of GBP92.0 million, from net debt of GBP163.6 million a year earlier.
Elsewhere, figures showed its active customer base rose by 1.5 million during the six-month period to 24.9 million.
Gross margins slipped however, as Covid-19 heaped pressure on freight costs. Margins fell to 45% from 47% a year earlier.
"We are delighted with our exceptional first-half performance and proud of the work our teams have put in to achieve this. These record results, which include robust growth in sales, customer numbers and profitability, demonstrate the significant progress we have made against all of our strategic priorities and the strength of our execution capability. The swift integration of the Topshop brands and the impressive early customer engagement is also especially pleasing," Chief Executive Officer Nick Beighton said.
"Looking ahead, while we are mindful of the short-term uncertainty and potential economic consequences of the continuing pandemic, we are confident in the momentum we have built, and excited about delivering on our ambition of being the number one destination for fashion-loving 20-somethings."
ASOS said its annual expectations have been lifted due to the much-improved first half. Its outlook for the second half alone is unchanged, however.
The said it is "well-positioned" though it is "retaining caution on near term consumer outlook" due to the timing of Covid-19 restrictions being lifted, as well as the possibility of future peaks of the virus.
Brick and mortar retailers in England will be able to lift shutters again from Monday as part of the UK government's roadmap out of lockdown.
ASOS shares were 0.5% lower at 5,760.00 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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