11th Jul 2005 07:00
ASOS PLC11 July 2005 FOR RELEASE7.00 amMonday 11 July 2005 ASOS plc " ASOS" or "Group" ("A leading Internet based fashion retailer") RECORD RESULTS Highlights 12 months to 31st March 2005 vs. unaudited pro forma accounts for 12 months toMarch 2004* •Group sales +79% to £13.5m •Group profit before tax and amortisation of goodwill +77% to £1.1m •Group profit after amortisation of goodwill and before tax +240% to £0.9m •Cash at bank +105% to £2.1m •Fully diluted EPS before tax and goodwill amortisation +67% to 1.5p •ASOS.com registered users + 58% to 600,000 (as at 4th July 2005) €1st quarter sales tracking over 100% year on year •Quieter summer, warehouse move and all important Christmas period still to come •Confident of another strong year * In 2004, the Group's year end was changed resulting in a 15 month audited setof accounts ASOS plcNick Robertson, Chief Executive Tel: 020 7240 7070Jon Kamaluddin, Finance Directorwww.asos.com Beattie FinancialBrian Coleman-Smith / Jo Clewlow / Nia Thomas Tel: 020 7053 6400Seymour PierceMark Percy / Ewan Leggat Tel: 020 7107 8000 ASOS plc is an Internet Retail and Marketing Services Group, established in June2000 and admitted to AIM in October 2001. Its principal business is ASOS.com, aleading online fashion and beauty retailer. Aimed primarily at an Internet savvy18-34 year old, ASOS has over 600,000 registered customers at 4 July 2005, andoffers over 1800 lines across womenswear, menswear, jewellery, beauty,accessories and footwear. ASOS PLCChief executive's statementfor the YEAR ended 31 MARCH 2005 Summary We continue to make significant strides in establishing ASOS as the UK's premieronline fashion retailer. The strategy of broadening the product offer has paid off. We currently sellaround 1800 lines, up from 500 a year ago and we add 100 to 150 new lines perweek. We are consistently the second most visited online fashion store in the UKbehind Next (source: Hitwise). In March 2005, ASOS.com attracted over onemillion unique visitors for the first time. There remains considerable opportunity for ASOS in the UK and we are on track todeliver another strong year of growth. Highlights 12 months to 31st March 2005 vs. unaudited pro forma accounts for 12 months toMarch 2004* •Group sales +79% to £13.5m •Group profit before tax and amortisation of goodwill +77% to £1.1m •Group profit after amortisation of goodwill and before tax +240% to £0.9m •Cash at bank +105% to £2.1m •Fully diluted EPS before tax and goodwill amortisation +67% to 1.5p •ASOS.com registered users + 58% to 600,000 (as at 4th July 2005) €1st quarter sales tracking over 100% year on year •Quieter summer, warehouse move and all important Christmas period still to come •Confident of another strong year * In 2004, the Group's year end was changed resulting in a 15 month audited setof accounts New department performances Through the course of the year we extended the product offer to include four newdepartments namely; footwear, jewellery, beauty and accessories. I am pleased toreport that all new departments made a valuable contribution to the business.The latest figures for June show womenswear continuing to dominate with 60% ofsales and the remaining 40% split as follows: female footwear 12%, femaleaccessories 6%, jewellery 5%, beauty products 3% and menswear held ground at14%. Stock levels We ended the year with £1.6m of stock compared to £0.5m at the same stage lastyear. We peaked at £1.9m in the run up to Christmas. Since the 31st March 2005,we have reduced this to approximately £1.1m equating to 4.4 weeks of forwardcover. At these levels, the space issues we experienced at Christmas have notbeen repeated. Gross margin The effect of the warehouse space issue over Christmas, and the subsequenthigher than budgeted discounting of winter stock, was a 1.5% drop in grossmargin for ASOS.com for the year to 45.9% from 47.4%. We have since recoveredthis loss and expect to achieve a gross margin for the current financial year ofat least 48%. Returns The average returns rate for the business is 20%. The rate is slightly higherfor womenswear but lower for menswear, beauty and jewellery. We anticipate asimilar level of returns for the year to March 2006. Basket value and average units per basket Both indices improved over the course of the year. On average, our customersplaced 2.4 items into their basket, up from 1.7 the previous year. They are nowspending on average, £45 (£37 ex VAT) per basket, up from £38 (£32 ex VAT).Approximately 4-5% of customers who visit ASOS make a purchase. Marketing Since Christmas we have invested considerable time updating both the web siteand all visual communication associated with ASOS. The results have been verypositive. The single biggest sales generator is our e-mail which we now send to 500,000female customers twice a week and 100,000 male customers once a week. This iseffectively 'free' marketing and its success has enabled us to reduce ourinvestment in more traditional forms of paid-for marketing such as magazines. In addition, we completely overhauled our online affiliate programme in May2005, reducing the cookie period (the time between a referred customer visitingASOS and ASOS paying a commission on a sale) to 7 days from 60 days and fixingthe majority of commissions at 10%. We also terminated all affiliate partnerswho were deemed to be misrepresenting ASOS or ASOS products. 3rd Party Revenues As the popularity of ASOS grows and traffic levels to the site increase, we areable to generate additional revenue for banner advertising and database sales.In the year to March 2005 we generated £229,000 this way. We expect this to riseto approximately £300,000 for the year to March 2006. International International sales equated to 6.7% of our online sales, up from 6.4% from thepervious period. No attempt was made to increase our International business overthe year as management focused its energies on growing UK market share andsales. An opportunity still exists for ASOS products to be represented on Amazon.com, subject to some minor technical work and a decision will be made shortlyas to whether or not we take up the opportunity this year. Logistics The move to our new 70,000 square feet logistics centre is on track for the lastweek in July / first week in August 2005. Consolidating our logistics under oneroof will enable us to operate with far greater degrees of efficiency. IT Behind the scenes, we have been upgrading our back office system to accommodatethe increased site traffic and order volumes. The online market In stark contrast to the high street, online retail sales continue to raceahead. The latest figures from the IMRG Index reported a 35.6% year on yearincrease for May 2005, equating to £1.5billion spent online during the month. The contributory factors appear to be the rapid take-up of broadband andgenerally better online shopping services and delivery solutions, inspiringgreater confidence in online shopping. Our customers are putting more items in their baskets and spending more perorder. There is also no shortage of new customers experiencing ASOS for thefirst time. Entertainment Marketing UK Ltd (EM) I am pleased to report that sales in our marketing subsidiary turned the corner.In the 12 months to 31 March 2005, we achieved sales of £744,232 compared tosales of £657,281 for the 15 months to 31 March 2004. We remain committed todeveloping the business and will continue to expand its range of services andresource accordingly. Our people On behalf of the board I would like to thank all our team for their commitmentand dedication over the year. I would like to offer a special thank you to ourcolleagues in Amersham who, under very testing circumstances, have kept theorders going out the door and our customers happy. I am pleased to report that Greg Conway, the former UK Managing Director ofTextured Jersey Limited, has today been appointed as an Executive Director withspecific responsibility for the supply chain. Nicky Wilkins has today stepped down from the Board. Nicky has agreed to staywith us for the next six months, which will see us through the Christmas periodand ensure a smooth handover. I would like to thank her for her contribution tothe continuing success of ASOS. Current trading & prospects We have had a good start to the new financial year and sales are currentlytracking at over 100% year on year. With the traditionally quieter Summer periodnearly on us, and the all important Christmas trading period yet to come, thissales comparison should not necessarily be taken as an indication of the outcomefor the full year. Overall, I believe the prospects for the Group are good and I am confident that2005/6 will be another strong year. Nick RobertsonChief Executive11th July 2005 FINANCE DIRECTOR'S REVIEWfor the YEAR ended 31 MARCH 2005 Results As noted in the Chief Executive's statement, the Group has had another strongyear and turnover rose to £13.518m. Of this, £12.773m is attributable to ASOS.com Limited and £0.744m to Entertainment Marketing (UK) Limited. The resulting profit before tax and amortisation of goodwill for the Group was£1.107m, which gave a fully diluted earnings per share of 1.5p. Following a review of procedures at the end of 2002, the Board decided to changeits accounting period to 31 March. This gave rise to a 15 month audited set ofaccounts for the comparative period 1 January 2003 to 31 March 2004. In order tomake a meaningful comparison a summary of the audited results for the year to 31March 2005 is shown below, against the unaudited proforma results for the 12months to 31 March 2004. Audited Unaudited Year on Year uplift 12 months Proforma 31 March 12 months 2005 31 March 2004 Group Sales £13.518m £7.541m 79% ASOS Sales £12.773m £7.004m 82% Group Profit before tax £1.107m £0.625m 77%(exc Goodwill Amortisation) Group Profit before tax £0.878m £0.258m 240% Fully diluted EPS 1.5p 0.9p 67%(before tax and Goodwill Amortisation) Dividends Inspite of two years of profitable trading the parent company still has retainedlosses and as such a dividend cannot be paid for the year to 31 March 2005. TheBoard will actively consider future dividend payments. Taxation Deferred tax assets of £0.270m (2004: £0.270m) have been recognised as thedirectors believe this amount is likely to be recovered in the foreseeablefuture. This asset arises from the availability of trading losses. This assetwill be recovered when sufficient trading profits have been generated to utilisethe trading losses. The Group has tax losses of £2.750m (2004: £1.944m) which are available foroffset against future taxable profits. Cashflow and Balance Sheet The Group was strongly cash generative for the 12 month period generating a£1.163m net cash inflow from operating activities (15 month period to 31 March2004: cash inflow £1.084m). Capital expenditure for the period was £0.299m (2004: £0.121m). This waspredominantly invested in computer hardware to support the continued growth intraffic to the website, the development of new software for use in-house and inpreparations for ASOS.com's warehouse move. During the period share options under the Group's EMI Approved Share Optionscheme were exercised raising £0.152m. As a result of a total cash inflow of £1.055m for the period, the Group had acash balance of £2.060m as at 31 March 2005 (2004: £1.004m). Surplus funds havebeen placed on time deposit with a AAA rated bank in accordance with the Group'slow risk investment policy. Interest receivable during the year amounted to£38,799. The Group continues to be cash generative in the current financial year and weare confident that we will continue to generate cash from operating activities. Net current assets increased to £2.036m at the year end (31 March 2004:£0.988m). Jon KamaluddinFinance Director11th July 2005 ASOS PLCConsolidated Profit And Loss Accountfor the YEAR ended 31 MARCH 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ TURNOVER 13,517,676 7,540,618 8,956,332Cost of sales (6,927,613) (3,710,709) (4,444,760) --------- --------- --------- GROSS PROFIT 6,590,063 3,829,909 4,511,572 Admin expenses (5,522,150) (3,207,863) (3,967,031)Amortisationof goodwill (228,334) (228,334) (285,418) --------- --------- ---------OPERATINGPROFIT 839,579 393,712 259,123 Interestreceivable/payable 38,653 3,126 (918) --------- --------- ---------PROFIT ONORDINARYACTIVITIESBEFORETAXATION 878,232 396,838 258,205 Tax on profiton ordinaryactivities - 270,000 270,000 PROFIT FOR THE FINANCIAL --------- --------- ---------PERIOD 878,232 666,838 528,205 --------- --------- --------- EARNINGS PER SHAREBasic 1.3p 1.0p 0.8pFully Diluted 1.2p 1.0p 0.8p The profit and loss account includes all recognised gains and losses in thecurrent and preceding year. All activities were derived from continuingoperations. ASOS PLCConsolidated Balance SheetAT 31 MARCH 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ FIXED ASSETSIntangibleassets 1,248,482 1,476,816 1,476,816Tangibleassets 327,315 116,182 116,182 --------- --------- --------- 1,575,797 1,592,998 1,592,998 --------- --------- --------- CURRENT ASSETSStocks 1,587,308 521,680 521,680Debtors 1,216,615 780,263 780,263Cash at bankand in hand 2,059,581 1,004,118 1,004,118 --------- --------- --------- 4,863,504 2,306,061 2,306,061 CREDITORS:amountsfalling duewithin oneyear (2,827,586) (1,317,883) (1,317,883) --------- --------- ---------NET CURRENTASSETS 2,035,918 988,178 988,178 --------- --------- --------- TOTAL ASSETS LESS --------- --------- ---------CURRENTLIABILITIES 3,611,715 2,581,176 2,581,176 --------- --------- --------- CAPITAL AND RESERVESCalled upshare capital 2,511,026 2,379,292 2,379,292Share premiumaccount 2,995,931 2,975,358 2,975,358Profit andloss account (1,895,242) (2,773,474) (2,773,474) SHAREHOLDERS' FUNDS --------- --------- ---------(ALL EQUITY) 3,611,715 2,581,176 2,581,176 --------- --------- --------- ASos PLCConsolidated Cash Flow Statementfor the YEAR ended 31 MARCH 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ Net cashinflow fromoperatingactivities 1,163,364 822,310 1,083,877 Returns on investments andservicing of financeInterestreceived 38,799 3,126 205Interest paid (146) - (1,123) --------- --------- --------- Net cashinflow/(outflow) fromreturns on investmentsand servicingof finance 38,653 3,126 (918) Capital expenditurePayments toacquiretangible fixedassets (298,861) (61,300) (120,501) --------- --------- --------- NET CASHINFLOW BEFOREFINANCING 903,156 764,136 962,458 FinancingNet inflowfrom issue ofordinaryshares 152,307 215,582 215,582Repayment ofshort termloan - (1,000) (1,000) --------- --------- --------- Net cashinflow fromfinancing 152,307 214,582 214,582 --------- --------- ---------INCREASE INCASH 1,055,463 978,718 1,177,040 --------- --------- --------- NOTES TO THE CASH FLOW STATEMENT Reconciliation of operating profit to net cash inflow from operating activities Year Proforma 15 Months ended Unaudited 12 Month period ended ended 31 March 31 March 2004 31 March 2004 2005 £ £ £ Operatingprofit 839,579 393,712 259,123Amortisationcharge 228,334 228,334 285,418Depreciationcharge 87,729 57,666 74,895(Increase)/decrease in stock (1,065,628) 90,405 100,534(Increase)/decrease indebtors (436,353) (173,974) 202,792Increase increditors 1,509,703 226,167 161,115 ------------ --------- ---------- 1,163,364 822,310 1,083,877 ------------ --------- ---------- EARNINGS PER SHARE The calculations of earnings per share are based on the following: Year 15 months Ended ended 31 March 31 March 2005 2004 Profit attributable to shareholders 1,384,065 528,205 Weighted Average number of shares: For basic earnings per share 69,917,012 64,861,996For diluted earnings per share 73,907,179 66,196,066 No shares have been issued between the year end and date of approval of thesefinancial statements. The financial information contained in the preliminary announcement does notconstitute the company's statutory financial statements. The company's auditorshave issued an unqualified report on the statutory financial statements for the12 months ended 31 March 2005 and have not made any statement under section 237(2) or (3) of the Companies Act 1985. A copy of the company's statutoryfinancial statements will be delivered to the Registrar of Companies shortly. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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