TIDMASC
RNS Number : 8550U
ASOS PLC
12 April 2016
12 April 2016
ASOS plc
Global Online Fashion Destination
Interim Results for the six months ended 29 February 2016
Summary results
Six months Six months Change CCY(2)
GBPm(1) to 29 February to 28 February Change
2016 2015
--------------------------- ---------------- ---------------- ------- --------
Group revenues(3) 667.3 550.5 21% 25%
Retail sales 648.6 536.4 21% 24%
UK retail sales 289.5 231.4 25% 25%
International retail
sales 359.1 305.0 18% 24%
Gross profit 324.8 265.2 22%
Retail gross margin 47.2% 46.8% 40bps
Gross margin 48.7% 48.2% 50bps
Profit before tax(4) 21.2 18.0 18%
Diluted earnings per
share 18.3p 17.6p 4%
Adjusted diluted earnings
per share(5) 20.3p 17.6p 15%
Cash and cash equivalents 135.9 64.9 109%
--------------------------- ---------------- ---------------- ------- --------
(1) All numbers subject to rounding
(2) On a constant currency basis
(3) Includes retail sales, delivery receipts and third party
revenues
(4) For the six months to 28 February 2015, profit before tax
includes business interruption reimbursements of GBP6.3m in respect
of a warehouse fire in the prior financial year which were
reinvested in our international pricing proposition
(5) Adjusted diluted earnings per share removes the one-off
increase in the Group's effective tax rate due to the release of
our deferred tax asset in relation to China as this entity's losses
will no longer be offset against future profits
Highlights
-- Strong performance in strategic markets: UK +25%, EU +31%, US +34% (in constant currency)
-- 10.9 million active customers(6) , up 17% on prior year
-- Retail gross margin up 40bps; gross margin up 50bps
-- Profit before tax of GBP21.2m (H1 2015: GBP18.0m)
-- Robust cash position of GBP135.9m (31 August 2015: GBP119.2m)
-- Technology and logistics plans on track and pace of change stepping up
Nick Beighton, CEO, commented:
"We've had a good start to the year and I'm pleased with
progress on a number of fronts. These results demonstrate improving
momentum in the business with group sales up 21% (25% in constant
currency). Our UK sales remain strong, up 25%, and our
international customers have responded well to our continuing price
investments with sales up 18% (24% in constant currency).
Particularly encouraging is the 17% growth in our active
customers to 10.9m, with benefits from our investment in our
technology and logistics delivering 21% growth in visits to our
sites and growth in average order frequency, basket value and
conversion.
We delivered profit before tax of GBP21.2m, growth of 18%, in
line with our expectations. I'm pleased to confirm that we are on
track to achieve our previously stated sales and margin guidance
for the full year."
(6) Defined as having shopped in the last twelve months as at 29
February 2016
Investor and Analyst Meeting
There will be a meeting for analysts that will take place at
9.30am today, 12 April 2016, 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 Instinctif Partners
using the details below.
For further information:
ASOS plc Tel: 020 7756 1000
Nick Beighton, Chief Executive Officer
Helen Ashton, Chief Financial Officer
Greg Feehely, Director of Investor
Relations
Website: www.asosplc.com/investors
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood / Justine Warren
/ Guy Scarborough
JPMorgan Cazenove Tel: 020 7742 4000
Michael Wentworth-Stanley / Caroline
Thomlinson
Numis Securities Tel: 020 7260 1000
Alex Ham / Luke Bordewich
Background note
ASOS is a global fashion destination for 20-somethings. We sell
cutting-edge fashion and offer a wide variety of fashion-related
content, making ASOS.com the hub of a thriving fashion community.
We sell over 80,000 branded and own-brand products through
localised mobile and web experiences, delivering from our
fulfilment centres in the UK, US, Europe and China to almost every
country in the world.
We tailor the mix of own-label, global and local brands sold
through each of our nine local language websites: UK, US, France,
Germany, Spain, Italy, Australia, Russia and China.
ASOS's websites attracted 106 million visits during February
2016 (February 2015: 88 million) and as at 29 February 2016 had
10.9 million active customers(1) (28 February 2015: 9.3 million),
of which 4.3 million were located in the UK and 6.6 million were
located in our international territories (28 February 2015: 3.7
million in the UK and 5.6 million internationally).
(1) Defined as having shopped in the last twelve months
www.asos.com
www.us.asos.com
www.asos.fr
www.asos.de
www.asos.es
www.asos.it
www.asos.com/au
www.asos.com/ru
www.asos.com/cn
m.asos.com
marketplace.asos.com
www.likes.asos.com
ASOS plc ("the Group")
Global Online Fashion Destination
Interim Results for the six months ended 29 February 2016
Business Review
The Group has delivered retail sales growth of 21% to GBP648.6m
(H1 2015: GBP536.4m) during the six months ended 29 February 2016,
with a continued strong performance in the UK accompanied by
encouraging growth in our other strategic markets. The margin
impact of investing in our prices has been more than offset by a
strong full price sales mix with retail gross margin up 40bps
against the comparative period. Similarly, increased investment in
our delivery proposition and marketing spend has been funded
through continued leverage in our warehousing costs. As a result,
profit before tax increased by 18% to GBP21.2m (H1 2015: GBP18.0m,
inclusive of final business interruption insurance reimbursements
of GBP6.3m).
We continue to invest in our UK customer, offering new, relevant
product with convenient delivery and return options.
Overseas, our two-year price investment journey continued with
further investments in the EU and the US during the period. These
investments, along with targeted zonal pricing reductions in our
strategic markets, helped improve the competitiveness of our
offer.
As previously communicated, we have decided to discontinue our
China in-country operation over the coming months. We will continue
to support our Chinese customers through our ASOS.com operations.
We incurred a loss of GBP2.7m (H1 2015: GBP3.1m) in our China
operation during the first six months of the financial year and
anticipate further losses of c.GBP1m before trading ceases.
Outlook
We remain confident of delivering in line with market
expectations for the financial year. We expect to deliver sales
growth of c.20%, an investment of up to 50bps in retail gross
margin and a Group EBIT margin of c.4.0% for the full year. Our
continuing operations will reflect a higher underlying EBIT margin
of c.4.5%, before inclusion of operating losses in relation to
discontinuing operations in China. We will also incur one-off
closure costs of c.GBP10m in respect of China, of which the
majority will be non-cash.
An expected benefit of c.GBP6-8m in the second half of the
financial year from the change in import duty thresholds in the US
during March 2016 will be fully reinvested back into our US
customer through price and proposition improvements. The remaining
investments previously planned for China of c.GBP2m will be
redeployed into other strategic markets to support future
growth.
Our mission remains unchanged: to be the world's no. 1 fashion
destination for 20-somethings. We focus on four strategic pillars:
Great fashion, great price - Awesome on mobile - Engaging content
and experience - Best-in-class service.
Great fashion, great price
Offering our 20-something customer an amazing, edited choice of
great fashion at great prices continues to be our primary retail
focus. We carry an extensive edit of over 80,000 lines and launch
around 3,500 new styles each week, with a key strategy of 'first
price, right price'. This, combined with continued tight inventory
control, has led to increased conversion and improving full price
sales, with a reduced reliance on promotional activity.
We continue to concentrate on giving our customer the best edit
of fashion and trends, combining our growing ASOS brand alongside
more than 850 brands. We have added 200 new exciting on-trend
brands, including niche and upcoming brands such as Lost Ink, Maya,
Stitches & Pieces and A Star is Born, as well as re-emerging
trend icons such as Fila, Champion and Replay. At the same time, we
exited 150 brands to ensure our overall offer remains fresh and
relevant. We also collaborate with many of our brands on lines that
are exclusive to our websites; we believe this approach offers our
customers true choice, helping inform their fashion decisions and
differentiating us from our competitors.
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Our ASOS brand performed strongly in Footwear, Outerwear and
Denim & Jersey during the season, supplemented by growth in
Lingerie, Underwear, Swimwear and Gifting. There has been increased
focus on developing product for every customer - with product
extensions and width across Petite, Tall, Plus and Maternity on
Womenswear and new trend fits such as longline and muscle-fit on
Menswear. Our collection of sub-brands has also grown with ASOS
White now firmly established as a year round offer, and our dress
collections delivering an unrivalled breadth of offer from ASOS Red
Carpet and ASOS Salon, to ASOS Bridesmaids and the new ASOS Bridal
collection.
We continue to apply our zonal pricing capability allowing us to
price brands in line with local markets. This tool has now been
applied to our largest brands, resulting in our branded sales mix
increasing to 55.6% (H1 2015: 51.8%) during the period.
Awesome on mobile
Mobile continues to dominate our customers' shopping behaviour,
with 3.2m app downloads in the first six months of the year (H1
2015: 2.5m), 1.4bn product views on our mobile apps and over 60% of
our traffic coming from mobile devices during this period. In
addition, nearly 50% of orders were placed on our mobile platforms
in February 2016.
We are constantly enhancing our mobile offering and launched an
updated iOS shopping app in October, offering new features such as
spotlight search and 3D Touch for iPhone 6S users, as well as
routing customers from email links and Facebook content straight
into the app. In March, we issued a further upgrade to this app
with refreshed underlying technology allowing easier and faster
navigation, a new homepage and product imagery to accompany our
most popular search categories. Over the next six months we will be
upgrading our Android app to reflect these same new features.
We have also made a number of user journey improvements to our
mobile web in collaboration with Google and our mobile checkout
programme continues on track with expected launch to both Android
and iOS customers later this financial year.
Engaging content and experience
We continue to put great emphasis on customer engagement where
we are achieving positive results, including growth of 21% in
visits, 3% in average order frequency, 2% in average basket value
and 10bps in conversion. We now have 10.9m active customers,
representing a 17% increase since last year.
Improvements in customer engagement are the result of many
continual initiatives across the business. We have redesigned our
website product pages, upgrading our personalised product
recommendations function and brought enhanced functionality to our
apps. There has been 50% growth in the uptake of our Premier
Delivery membership in the UK, US, France, Germany and Australia,
driven in part by unlimited next-day delivery options in France,
Germany and Northern Ireland. In February we launched 'ASOS
A-List', recognising our loyal customers in the UK by giving them
points on purchases building into ASOS vouchers as well as access
to other rewards such as birthday discounts, free next day
deliveries and access to exclusive competitions.
Students are core customers at ASOS. We rolled out our new
student initiative across the UK, France, Germany, Spain, Italy,
the US and Australia giving students discounts every time they shop
as well as access to exclusive offers and events. At the same time,
we launched 'As Seen On Campus' in all our markets, bringing great
content to university students from our On-Campus ASOS
Insiders.
We are driving encouraging performance across our social
platforms with over 17m followers across our channels. ASOS
Insiders (formerly called stylists) continue to build direct
relationships with customers, now with over 1m followers between
them. In the UK, we relaunched our 'AccessAllASOS' advocates
programme and ran our first ever #UniversityofASOS campaign
offering tips on search engine optimisation. Building on last
year's launch of YouTube and Instagram accounts in France and
Germany, we introduced local language Snapchat channels in these
markets. We also delivered a localised version of the ASOS magazine
to our most loyal customers in France with a German version
following soon.
We constantly roll out relevant, engaging content for our
audience on the channels we know they love, including Facebook,
Twitter, YouTube, Snapchat, Instagram and Tumblr, amongst others.
Snapchat is an increasingly important channel for our customers:
during London Fashion Week, ASOS content featured in their 'Fashion
Week Stories' series which was viewed more than 20m times in the
UK, France, Germany and Australia. Our Instagram content is
'shoppable' through 'As Seen On Instagram' links to our website. We
rolled out 'As Seen On Me' in Germany, France,
Australia and the US enabling more of our customers to share
images of themselves wearing ASOS product on social media and on
our websites.
Our emphasis on customer engagement through a constant stream of
fresh, stimulating content is an ASOS differentiator that we are
putting increasing resource behind.
Best-in-class service
Delivery and returns
Over the last six months we have continued to expand the
delivery solutions available to our customers as we strive to offer
a best-in-class customer proposition.
In the UK, we extended our Click & Collect service with
Boots and now deliver to 61 stores across several major cities
nationwide. We have also introduced Doddle Click & Collect into
24 London stores and in January launched a returns solution with
"ToYou" with ASDA. More recently we have introduced a 4-hour
estimated delivery window with Hermes for standard delivery and
returns collections as well as a mobile label-less returns solution
with Pass My Parcel in 3,000 locations.
Over the next six months we plan to expand our next-day delivery
coverage, increase our Boots and Doddle locations, extend Click
& Collect cut-offs to 7pm and launch a faster tracked Royal
Mail returns option.
Internationally, we introduced unlimited free next-day
deliver-to-store for our French Premier customers and next-day
delivery for our German and Northern Irish Premier customers. We
launched next-day delivery in Austria, Luxembourg, Poland and
Portugal, and next-day deliver-to-store in Italy and the
Netherlands. We improved our standard delivery service in Austria
and Poland by launching a tracked delivery service with a five day
lead time. Further afield, our mid-tier delivery service was
launched in Hong Kong, and in Singapore and South Korea our
proposition was improved to seven days.
We have just launched free returns in Belgium, Ireland, Denmark,
Sweden and Spain and plan to further invest in extending this
proposition across all remaining EU countries by the end of
April.
Customer Care
Supporting our customers through every stage of their journey
with ASOS is essential for delivering a best-in-class service. We
have maintained our service levels during the first half of the
year, responding to all emails within one hour, all social media
communications made by our customers within 15 minutes, and all
live chat or telephony within 30 seconds.
We have continued to develop and improve the self-serve
experience for customers with the launch of our updated help
section, making more help and information available on both our
desktop and mobile sites. We have also made it easier to contact
our customer advisors with the continued development of our live
chat offering, coupled with investment in our social capabilities
to better serve customers. We have also recently deployed new
technology that, based on the nature of the request, automatically
sends customers to the best available advisor; this is a step
change forward in improving the quality of service we deliver.
Logistics
Investment in our supply chain capability continues to be one of
our strategic priorities.
Productivity targets continue to be met in Barnsley resulting in
associated costs falling during the first six months of the
financial year. This enabled us to despatch record levels over the
Black Friday weekend, with nearly 3m units despatched over the
busiest seven days of the peak Christmas trading period. Our
returns processing facility at Selby also hit new productivity
levels during the period and we plan to further increase capacity
before our next peak period.
Stockholding has continued to grow at our existing Eurohub
facility and we ended the period holding 3m units as part of our
plan to increase fulfilment to the EU from Berlin. We now regularly
despatch around 45% of EU orders from our Eurohub and in February
added Belgium, the Netherlands, Spain and Denmark to the local
despatch list. Our returns facility in Swiebodzin continues to
receive increased numbers of EU returns.
Our Eurohub 2 build continues on track with full ground works
now underway. The site will be handed over in September 2016 in
advance of operations commencing during early 2017.
Our US warehouse continues to consistently fulfil around 25% of
US orders. We are currently investigating options to accelerate our
future US logistics plans.
Technology
Our technology platform continues to evolve at pace and as a
result we handled record volumes during Black Friday and Cyber
Monday, up to nine orders per second at its peak.
Several key programmes will be completed this financial year
delivering many of the core services such as payment, order and
fraud processing which will power our new checkout on mobile,
desktop and tablet sites. Our new architecture is more flexible and
scalable than our legacy systems which will support our future
growth ambitions.
We have also now mobilised our global fulfilment programme which
will optimise our global stock management capabilities and
warehouse expansion plans. The programme will deliver the
fulfilment logic between our country websites and our fulfilment
centres coupled with a new end-to-end retail, merchandising and
planning system.
People
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April 12, 2016 02:00 ET (06:00 GMT)
The ASOS team grew by 19% to 2,416 employees at 29 February 2016
(31 August 2015: 2,038). The additions to our team were principally
within Technology and Customer Care.
Karen Jones, Non-Executive Director and Remuneration Committee
Chair for over 6 years, stepped down from the Board in December.
Karen provided wise counsel and challenge, playing a considerable
part in making ASOS what it is today and we are grateful for her
contribution. Hilary Riva now chairs the Remuneration
Committee.
Nick Beighton Helen Ashton
Chief Executive Officer Chief Financial Officer
Financial review
Revenue
Six months to 29 February Group International
2016
GBPm(1) total UK US EU RoW total
------------------------------ ------ ------ ----- ------ ------ --------------
Retail sales 648.6 289.5 76.8 167.9 114.4 359.1
Growth 21% 25% 41% 23% - 18%
Growth at constant exchange
rate 24% 25% 34% 31% 10% 24%
Delivery receipts 16.1 7.2 2.7 3.2 3.0 8.9
Growth 37% 33% 72% 42% 19% 40%
Third party revenues 2.6 2.4 0.1 - 0.1 0.2
Growth 13% 4% 100% - 100% 100%
Total revenues 667.3 299.1 79.6 171.1 117.5 368.2
Growth 21% 25% 42% 24% 1% 18%
Growth at constant exchange
rate 25% 25% 35% 31% 11% 24%
------------------------------ ------ ------ ----- ------ ------ --------------
(1) All numbers subject to rounding
The Group generated retail sales growth of 21% during the
period, with growth of 25% in the UK and 18% in our international
markets (24% in constant currency), where we continue to see the
benefits of our price investment journey. International retail
sales accounted for 55% (H1 2015: 57%) of total retail sales.
Retail sales in the UK increased by 25%, following our biggest
ever Christmas trading period and continual improvement to our
market-leading proposition in this territory. We retained our first
place position for unique visitors to apparel retailers in the
15-34 age range (Comscore, February 2016).
US retail sales grew by 41% (34% in constant currency) following
further expansion of our range of locally relevant brands, price
investments and uptake of our premier membership scheme. The
previously anticipated recent change in US import duty thresholds
from $200 to $800 following the approval of the 'Trade Facilitation
and Trade Enforcement Act' in March 2016 could provide c.GBP6-8m of
benefit in the second half of the financial year which we will
fully reinvest back into the US customer through price and
proposition improvements.
The EU has benefited from our continued price investments and
proposition expansions with sales growth of 23% (31% in constant
currency).
Our Rest of World segment continues to be affected by adverse
currency movements with reported sales in line with the comparative
period (10% in constant currency).
Delivery receipts increased by 37% as we expand our range of
paid delivery options and uptake in our premier delivery scheme
continues to grow. Third party revenues, which mainly comprise
advertising revenues from the website and the ASOS magazine,
increased by 13% as we undertook campaigns with Google Play,
G-Star, Calvin Klein and many more.
Customer engagement
We have continued to attract new customers and had 10.9m active
customers(2) at 29 February 2016, an increase of 17% since the
comparative period. Average basket value increased by 2%, driven by
our strong full price sales mix increasing average selling prices.
Conversion(3) increased by 10bps and average order frequency
increased by 3%, both reflecting the compelling nature of our
proposition.
Six months Six months Change
to 29 February to 28 February
2016 2015
------------------------------------------- ---------------- ---------------- -------
Active customers(2) (m(4) ) 10.9 9.3 17%
Average basket value (including
VAT) GBP68.86 GBP67.12 2%
Average units per basket 2.70 2.72 (1%)
Average selling price per unit (including
VAT) GBP25.51 GBP24.70 3%
Total orders (m(4) ) 17.5 14.1 24%
Total visits (m(4) ) 634.0 523.7 21%
------------------------------------------- ---------------- ---------------- -------
(2) Defined as having shopped during the last twelve months
(3) Calculated as total orders divided by total visits
(4) All numbers subject to rounding
Gross profitability
Six months to 29 February Group International
2016
GBPm(1) total UK US EU RoW Total
--------------------------- ------ ------- --------- ------ --------------
Gross profit (GBPm) 324.8 138.7 47.7 79.2 59.2 186.1
Growth 22% 30% 46% 18% 2% 18%
Retail gross margin 47.2% 44.6% 58.6% 45.3% 49.0% 49.3%
Growth 40bps 170bps 140bps (250bps) 40bps (50bps)
Gross margin 48.7% 46.4% 60.0% 46.3% 50.4% 50.5%
Growth 50bps 160bps 160bps (230bps) 60bps (30bps)
--------------------------- ------ ------- ------- --------- ------ --------------
(1) All numbers subject to rounding
Group retail gross margin increased by 40bps to 47.2% compared
with last half year (H1 2015: 46.8%) as our price investments were
more than offset by a strong full price sales mix everywhere apart
from the EU, where our price investments have been deepest and
annualise in the second half of the financial year. Gross margin
(including third-party revenues and delivery receipts) increased by
50bps to 48.7% (H1 2015: 48.2%).
Operating expenses
The Group increased its investment in operating resources by 20%
to GBP303.8m, while our total operating costs to sales ratio
improved by 50bps over the same period.
Six months to Six months
29 February to
2016 28 February
GBPm(1) 2015 Change
------------------------------- -------------- ------------- -------
Distribution costs (97.5) (78.8) (24%)
Payroll and staff costs (62.1) (50.3) (23%)
Warehousing (53.4) (50.1) (7%)
Marketing (34.8) (26.4) (32%)
Production (2.9) (2.4) (21%)
Technology costs (12.1) (9.6) (26%)
Other operating costs (26.1) (25.5) (2%)
Depreciation and amortisation (14.9) (10.4) (43%)
------------------------------- -------------- ------------- -------
Total operating costs (303.8) (253.5) (20%)
Operating cost ratio (% of
sales) 45.5% 46.0% 50bps
------------------------------- -------------- ------------- -------
(1) All numbers subject to rounding
Distribution costs increased by 30bps to 14.6% of sales, driven
by the expansion of our delivery proposition in the UK as well as
our other strategic markets.
Staff costs increased by 20bps to 9.3% of sales due to headcount
increases, particularly within our Technology and Customer Care
teams.
Warehousing costs decreased by 110bps to 8.0% of sales due to
increased efficiency at Barnsley compared to the same period last
year when we incurred some one-off additional costs following the
launch of our automation technology.
Marketing costs increased by 40bps to 5.2% of sales as we
continue to expand our digital marketing activities, particularly
on mobile, in order to drive awareness and grow our market
share.
Other operating costs decreased by 70bps to 3.9% of sales due to
a continued focus on cost control and retranslation gains on our
foreign currency cash and intercompany balances.
Depreciation increased by 30bps to 2.2% of sales following
recent acceleration of investments in our warehouse and IT
infrastructure.
Costs incurred by our China operation, relating largely to
warehousing, marketing and staff costs, are included in the
above.
Other income
In the comparative period to 28 February 2015 we received final
business interruption insurance reimbursements of GBP6.3m as a
result of a fire in our Barnsley warehouse in June 2014. This
amount is included within a separate line item titled 'Other
income' in the Income Statement.
Income statement
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The Group generated profit before tax of GBP21.2m, up 18%
compared to last year (H1 2015: GBP18.0m), due to improvement in
our gross margin as well as operating expense leverage.
Six months Six months
to 29 February to
2016 28 February
GBPm(1) 2015 Change
------------------------- ---------------- ------------- -------
Revenue 667.3 550.5 21%
Cost of sales (342.5) (285.3)
------------------------- ---------------- ------------- -------
Gross profit 324.8 265.2 22%
Distribution expenses (97.5) (78.8) (24%)
Administrative expenses (206.3) (174.7) (18%)
Other income - 6.3
Operating profit 21.0 18.0 17%
Net finance income 0.2 -
Profit before tax 21.2 18.0 18%
Income tax expense (6.0) (3.7)
------------------------- ---------------- ------------- -------
Profit after tax 15.2 14.3 6%
------------------------- ---------------- ------------- -------
(1) All numbers subject to rounding
Taxation
The effective tax rate increased by 760bps to 28.3% (H1 2015:
20.7%) due to the release of our deferred tax asset in relation to
China as this entity's losses will no longer be offset against
future profits. Excluding the impact of China, the effective tax
rate for the rest of the Group would have been 20.7%. Going
forward, we expect 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 4% to 18.3p
(H1 2015: 17.6p), both driven by the increase in profit before tax
during the period offset by an increased effective tax rate due to
the release of our deferred tax asset in relation to China.
Excluding this one-off impact of China, basic and diluted earnings
per share would have increased by 15% to 20.3p (H1 2015:
17.6p).
Statement of financial position
The Group continues to enjoy a robust financial position
including a strong cash balance.
Net assets decreased by GBP18.1m to GBP219.2m during the period
(31 August 2015: GBP237.3m) as the Group's profit after tax of
GBP15.2m was more than offset by a fair value decline of GBP43.2m
in our outstanding forward contracts as at 29 February 2016
following adverse exchange rate movements. The summary statement of
financial position is shown below.
GBPm(1) At At
29 February 2016 31 August 2015
------------------------------------------- ------------------ ----------------
Goodwill and other intangible assets 92.9 76.2
Property, plant and equipment 66.9 64.4
Derivative financial assets - 0.2
Deferred tax asset 2.3 -
------------------------------------------- ------------------ ----------------
Non-current assets 162.1 140.8
------------------------------------------- ------------------ ----------------
Inventories 198.0 193.8
Net current payables (235.6) (214.5)
Cash and cash equivalents 135.9 119.2
Derivative financial (liabilities)/assets (36.9) 6.1
Current tax liability (5.2) (3.6)
Deferred tax asset/(liability) 0.9 (4.5)
------------------------------------------- ------------------ ----------------
Net assets 219.2 237.3
------------------------------------------- ------------------ ----------------
(1) All numbers subject to rounding
Statement of cash flows
The Group's cash balance increased by GBP16.7m to GBP135.9m
during the period (31 August 2015: GBP119.2m) as capital
expenditure of GBP31.9m was offset by a cash inflow from operating
activities of GBP47.8m. This inflow was driven by EBITDA
improvements of GBP7.5m and significant working capital inflows
following amendment of our supplier payment terms last financial
year. The summary statement of cash flows is shown below.
GBPm(1) Six months to Six months to
29 February 2016 28 February 2015
------------------------------------------------------- ------------------ ------------------
Operating profit 21.0 18.0
Depreciation and amortisation 14.9 10.4
Working capital 14.1 (12.2)
Share-based payments charge 1.6 1.1
Other non-cash items (0.3) 0.4
Tax paid (3.5) (0.2)
Cash inflow from operating activities 47.8 17.5
Capital expenditure (31.9) (26.9)
Net finance income received 0.3 -
------------------------------------------------------- ------------------ ------------------
Total cash inflow/(outflow) 16.2 (9.4)
Opening cash and cash equivalents 119.2 74.3
Effect of exchange rates on cash and cash equivalents 0.5 -
------------------------------------------------------- ------------------ ------------------
Closing cash and cash equivalents 135.9 64.9
------------------------------------------------------- ------------------ ------------------
(1) All numbers subject to rounding
Fixed asset additions
GBPm(1) Six months Six months
to to
29 February 28 February
2016 2015
----------------------------- ------------- -------------
IT 27.0 14.4
Office fixtures and fit-out 1.5 0.7
Warehouse 5.7 8.5
Total 34.2 23.6
----------------------------- ------------- -------------
(1) All numbers subject to rounding
We continue to invest in our warehousing and IT infrastructure
to support our future growth ambitions. The majority of our IT
spend related to our replatforming programme and the new global
fulfilment programme including an end-to-end retail merchandising
system with supporting finance system, whilst our warehousing spend
related to improvements to our Barnsley automation technology.
CONDENSED UNAUDITED Consolidated Statement of Total
Comprehensive Income
For the six months ended 29 February 2016
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Revenue 667.3 550.5 1,150.8
Cost of sales (342.5) (285.3) (576.0)
---------------- ---------------- -----------
Gross profit 324.8 265.2 574.8
Distribution expenses (97.5) (78.8) (168.7)
Administrative expenses (206.3) (174.7) (365.1)
------------------------------------------ ---------------- ---------------- -----------
Warehouse fire: insurance reimbursements - 6.3 6.3
------------------------------------------ ---------------- ---------------- -----------
Other income (Note 4) - 6.3 6.3
Operating profit 21.0 18.0 47.3
Finance income 0.2 0.1 0.3
Finance expense - (0.1) (0.1)
---------------- ---------------- -----------
Profit before tax 21.2 18.0 47.5
Income tax expense (6.0) (3.7) (10.6)
---------------- ---------------- -----------
Profit for the period 15.2 14.3 36.9
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================ ================ ===========
Net translation movements offset in
reserves (0.6) (0.1) (0.1)
Fair value (loss)/gain on derivative
financial (liabilities)/assets (43.2) 10.1 4.1
Income tax relating to these items 8.4 - -
================ ================ ===========
Other comprehensive (loss)/income
for the period(2) (35.4) 10.0 4.0
================ ================ ===========
Total comprehensive (loss)/income (20.2) 24.3 40.9
================ ================ ===========
Profit/(loss) attributable to:
Owners of the parent company 15.2 14.6 36.9
Non-controlling interest - (0.3) -
---------------- ---------------- -----------
15.2 14.3 36.9
================ ================ ===========
Total comprehensive (loss)/income
attributable to:
Owners of the parent (20.2) 24.6 40.9
Non-controlling interest - (0.3) -
---------------- ---------------- -----------
(20.2) 24.3 40.9
================ ================ ===========
Earnings per share (Note 5)
Basic 18.3p 17.6p 44.4p
Diluted 18.3p 17.6p 44.4p
================ ================ ===========
(1) All numbers subject to rounding
(2) All items of other comprehensive income may be reclassified
to profit or loss
CONDENSED UNAUDITED Consolidated Statement of Changes in
Equity
For the six months ended 29 February 2016
Equity
Employee attributable
Called Benefit to owners
up share Share Retained Trust Hedging Translation of the Non-controlling Total
capital premium earnings(2) reserve reserve reserve parent interest equity
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 September
2015 2.9 6.9 225.1 (3.6) 6.3 (0.3) 237.3 - 237.3
Profit for the
period - - 15.2 - - - 15.2 - 15.2
Other
comprehensive
income/(loss)
for the
period - - 8.4 - (43.2) (0.6) (35.4) - (35.4)
--------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------- ---------------- ------------
Total
comprehensive
income/(loss)
for the
period - - 23.6 - (43.2) (0.6) (20.2) - (20.2)
Transfer of
shares
from EBT(3)
on
exercise - - (0.2) 0.2 - - - - -
Share-based
payments
charge - - 2.1 - - - 2.1 - 2.1
At 29 February
2016 2.9 6.9 250.6 (3.4) (36.9) (0.9) 219.2 - 219.2
=============== ============ ============ ============ ============ ============ ============ ============= ================ ============
Employee Equity
Called up Benefit attributable
share Share Retained Trust Hedging Translation to owners of Non-controlling Total
capital premium earnings(2) reserve reserve reserve the parent interest equity
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
At 1 September
2014 2.9 6.9 186.9 (5.3) 2.2 (0.2) 193.4 (0.4) 193.0
Profit/(loss)
for the
period - - 14.6 - - - 14.6 (0.3) 14.3
Other
comprehensive
income/(loss)
for the
period - - - - 10.1 (0.1) 10.0 - 10.0
--------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------- ---------------- ------------
Total
comprehensive
income/(loss)
for the
period 14.6 10.1 (0.1) 24.6 (0.3) 24.3
Transfer of
shares from
EBT(3) on
exercise - - (0.1) 0.1 - - - - -
Share-based
payments
charge - - 1.1 - - - 1.1 - 1.1
Deferred tax
on items
taken
directly to
equity - - 0.1 - - - 0.1 - 0.1
Current tax on
items taken
directly to
equity - - 0.2 - - - 0.2 - 0.2
--------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------- ---------------- ------------
At 28 February
2015 2.9 6.9 202.8 (5.2) 12.3 (0.3) 219.4 (0.7) 218.7
=============== ============ ============ ============ ============ ============ ============ ============= ================ ============
Called Employee Equity
up Benefit attributable
share Share Retained Trust Hedging Translation to owners of Non-controlling Total
capital premium earnings(2) reserve reserve reserve the parent interest equity
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
At 1 September
2014 2.9 6.9 186.9 (5.3) 2.2 (0.2) 193.4 (0.4) 193.0
Profit for the
period - - 36.9 - - - 36.9 - 36.9
Other
comprehensive
income/(loss)
for the period - - - - 4.1 (0.1) 4.0 - 4.0
----------------- -------- ---------- ------------ --------- -------- ------------ ------------- ---------------- --------
Total
comprehensive
income/(loss)
for the period - - 36.9 - 4.1 (0.1) 40.9 - 40.9
Net cash
received on
exercise of
shares from
EBT(3) - - - 0.9 - - 0.9 - 0.9
Transfer of
shares from
EBT(3) on
exercise - - (0.8) 0.8 - - - - -
Share-based
payments charge - - 3.5 - - - 3.5 - 3.5
Acquisition of
non-controlling
interest in
Covetique Ltd - - (0.4) - - - (0.4) 0.4 -
Deferred tax on
items taken
directly to
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equity - - (1.3) - - - (1.3) - (1.3)
Current tax on
items taken
directly to
equity - - 0.3 - - - 0.3 - 0.3
----------------- -------- ---------- ------------ --------- -------- ------------ ------------- ---------------- --------
At 31 August
2015 2.9 6.9 225.1 (3.6) 6.3 (0.3) 237.3 - 237.3
================= ======== ========== ============ ========= ======== ============ ============= ================ ========
(1) All numbers subject to rounding
(2) Retained earnings includes the share-based payments
reserve
(3) Employee Benefit Trust and Capita Trust
CONDENSED UNAUDITED Consolidated Statement of Financial
PositioN
At 29 February 2016
At At At
29 February 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Non-current assets
Goodwill 1.1 1.1 1.1
Other intangible assets 91.8 69.4 75.1
Property, plant and equipment 66.9 61.1 64.4
Derivative financial assets
(Note 8) - - 0.2
Deferred tax asset 2.3 - -
------------- ------------- -----------
162.1 131.6 140.8
------------- ------------- -----------
Current assets
Inventories 198.0 161.6 193.8
Trade and other receivables 23.2 18.6 18.0
Derivative financial assets
(Note 8) - 12.3 6.1
Deferred tax asset 0.9 - -
Cash and cash equivalents (Note
6) 135.9 64.9 119.2
-------------
358.0 257.4 337.1
------------- ------------- -----------
Current liabilities
Trade and other payables (258.8) (167.8) (232.5)
Derivative financial liabilities (25.3) - -
(Note 8)
Current tax liability (5.2) (1.4) (3.6)
Deferred tax liability - - (1.2)
------------- ------------- -----------
(289.3) (169.2) (237.3)
------------- ------------- -----------
Net current assets 68.7 88.2 99.8
-------------
Non-current liabilities
Derivative financial liabilities (11.6) - -
(Note 8)
Deferred tax liability - (1.1) (3.3)
------------- ------------- -----------
(11.6) (1.1) (3.3)
------------- ------------- -----------
Net assets 219.2 218.7 237.3
============= ============= ===========
Equity attributable to owners
of the parent
Called up share capital 2.9 2.9 2.9
Share premium 6.9 6.9 6.9
Employee Benefit Trust reserve (3.4) (5.2) (3.6)
Hedging reserve (36.9) 12.3 6.3
Translation reserve (0.9) (0.3) (0.3)
Retained earnings 250.6 202.8 225.1
-------------
219.2 219.4 237.3
------------- ------------- -----------
Non-controlling interests - (0.7) -
Total equity 219.2 218.7 237.3
============= ============= ===========
(1) All numbers subject to rounding
CONDENSED UNAUDITED Consolidated Statement of Cash Flows
For the six months ended 29 February 2016
Six months Six months Year to
to 29 February to 28 February 31
2016 2015 August 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Operating profit 21.0 18.0 47.3
Adjusted for:
Depreciation of property, plant and
equipment 5.1 3.7 8.3
Amortisation of other intangible
assets 9.8 6.7 14.8
Loss on disposal of non-current assets - 0.1 4.9
(Increase)/decrease in inventories (4.2) 0.1 (32.1)
(Increase)/decrease in trade and
other receivables (5.1) 1.8 2.3
Increase/(decrease) in trade and
other payables 23.4 (14.1) 47.6
Share-based payments charge 1.6 1.1 2.2
Other non-cash items (0.3) 0.3 0.7
Income tax paid (3.5) (0.2) (2.8)
---------------- ---------------- -------------
Net cash generated from operating
activities 47.8 17.5 93.2
Investing activities
Payments to acquire other intangible
assets (23.3) (15.2) (32.5)
Payments to acquire property, plant
and equipment (8.6) (11.7) (17.9)
Finance income 0.4 0.1 0.3
Net cash used in investing activities (31.5) (26.8) (50.1)
Financing activities
Net cash inflow relating to Employee
Benefit Trust - - 0.9
Finance expense (0.1) (0.1) (0.1)
---------------- ---------------- -------------
Net cash (used)/generated in financing
activities (0.1) (0.1) 0.8
Net increase/(decrease) in cash and
cash equivalents 16.2 (9.4) 43.9
================ ================ =============
Opening cash and cash equivalents 119.2 74.3 74.3
Effect of exchange rates on cash
and cash equivalents 0.5 - 1.0
---------------- ---------------- -------------
Closing cash and cash equivalents 135.9 64.9 119.2
================ ================ =============
(1) All numbers subject to rounding
Notes to the CONDENSED UNAUDITED financial information
For the six months ended 29 February 2016
1. Preparation of the condensed unaudited consolidated financial
information ("interim financial statements")
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, Russia and China. The Company is a
public limited company which is listed on the Alternative
Investment Market (AIM) and is incorporated and domiciled in the
UK. The address of its registered office is Greater London House,
Hampstead Road, London NW1 7FB.
The interim financial statements have been reviewed, not audited
and were approved by the Board of Directors on 11 April 2016.
b) Basis of preparation
The interim financial statements for the six months ended 29
February 2016 have been prepared in accordance with IAS 34,
"Interim Financial Reporting" as adopted by the European Union. The
interim financial statements should be read in conjunction with the
Group's Annual Report and Accounts for the year ended 31 August
2015, which has been prepared in accordance with IFRSs as adopted
by the European Union.
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The interim financial statements have been reviewed, not
audited, and do not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. The Annual Report
and Accounts for the year ended 31 August 2015 has been filed with
the Registrar of Companies. The auditors' report on those accounts
was unqualified, did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying the report and did not contain statements under s498 of
the Companies Act 2006.
The Group's business activities together with the factors that
are likely to affect its future developments, performance and
position are set out in the Business Review. The Business Review
describes the Group's financial position, cash flows and borrowing
facilities.
Going concern
The Directors have reviewed current performance and forecasts,
combined with expenditure commitments, including capital
expenditure. After making enquiries, the Directors have a
reasonable expectation that the Group has adequate financial
resources to continue its current operations, including contractual
and commercial commitments for the foreseeable future. For this
reason, they have continued to adopt the going concern basis in
preparing the interim financial statements.
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, the
interim financial statements have been prepared in accordance with
IAS 34 "Interim Financial Reporting" as adopted by the European
Union, and that the interim management report includes a fair
review of the information required.
Accounting policies
The interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the year ended 31 August 2015. Various new
accounting standards and amendments were issued during the period,
none of which have had or are expected to have any significant
impact on the Group, and none of which have been adopted early.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to the expected total annual
earnings.
2. Principal risks and uncertainties
The Board considers the principal risks and uncertainties which
could impact the Group over the remaining six months of the
financial year to 31 August 2016 to be unchanged from those set out
in the Annual Report and Accounts for the year ended 31 August
2015, summarised as follows:
- Technological risk, including robustness and sufficiency of IT
systems and infrastructure, and IT capacity and capability keeping
pace with business growth and complexity
- Financial risks, including ensuring our UK business model is
profitable on a scalable basis in key territories and managing
exposure to changes in foreign exchange rates
- Market risks, including failure to meet customer demand and
changing tastes, maintaining our market position and
fashionability, or an inadequate digital experience
- Supply chain risks, including interruption to supply of core
category products and disruption to delivery services or
warehousing activities and capacity
- Reputational risks around (a) our brand name, including trade
mark oppositions, legal claims and formal litigation as a result of
failure or inability to support and protect our brand, trademarks
and domain names, and (b) the security of our customer and business
data, including unauthorised access to or breach of our systems and
records
- Reliance on key personnel
These are set out in detail on pages 20 to 23 of the Group's
Annual Report and Accounts for the year ended 31 August 2015, a
copy of which is available on the Group's website, www.asosplc.com.
Information on financial risk management is also detailed on pages
78 to 79 of the Annual Report.
3. Segmental analysis
IFRS 8 'Operating Segments' requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker. The Chief Operating Decision Maker has
been determined to be the Executive Board and has determined that
the primary segmental reporting format of the Group is geographical
by customer location, based on the Group's management and internal
reporting structure.
The Executive Board assesses the performance of each segment
based on revenue and gross profit after distribution expenses,
which excludes administrative expenses.
Six months to 29 February 2016 (unaudited)
UK US EU RoW Total
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
Retail sales 289.5 76.8 167.9 114.4 648.6
Delivery receipts 7.2 2.7 3.2 3.0 16.1
Third party revenues 2.4 0.1 - 0.1 2.6
Internal revenues - - - 2.4 2.4
--------- --------- --------- -------- --------
Total segment revenue 299.1 79.6 171.1 119.9 669.7
Eliminations - - - (2.4) (2.4)
--------- --------- --------- -------- --------
Total revenue 299.1 79.6 171.1 117.5 667.3
Cost of sales (160.4) (31.9) (91.9) (58.3) (342.5)
--------- --------- --------- -------- --------
Gross profit 138.7 47.7 79.2 59.2 324.8
Distribution expenses (33.2) (22.7) (23.3) (18.3) (97.5)
--------- --------- --------- -------- --------
Segment result 105.5 25.0 55.9 40.9 227.3
Administrative expenses (206.3)
Operating profit 21.0
Finance income 0.2
Profit before tax 21.2
========
Internal revenues relate to sale of stock by ASOS.com to ASOS
(Shanghai) Commerce Co. Limited.
(1) All numbers subject to rounding
3. Segmental analysis (continued)
Six months to 28 February 2015 (unaudited)
UK US EU RoW Total
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
Retail sales 231.4 54.5 136.2 114.3 536.4
Delivery receipts 5.4 1.6 2.2 2.6 11.8
Third party revenues 2.3 - - - 2.3
Internal revenues 0.4 - - 1.3 1.7
--------- --------- --------- -------- --------
Total segment revenue 239.5 56.1 138.4 118.2 552.2
Eliminations (0.4) - - (1.3) (1.7)
--------- --------- --------- -------- --------
Total revenue 239.1 56.1 138.4 116.9 550.5
Cost of sales (132.1) (23.3) (71.2) (58.7) (285.3)
--------- --------- --------- -------- --------
Gross profit 107.0 32.8 67.2 58.2 265.2
Distribution expenses (25.1) (17.2) (18.1) (18.4) (78.8)
--------- --------- --------- -------- --------
Segment result 81.9 15.6 49.1 39.8 186.4
Administrative expenses (174.7)
Net other income 6.3
Operating profit 18.0
Finance income 0.1
Finance expense (0.1)
--------
Profit before tax 18.0
========
Year to 31 August 2015 (audited)
UK US EU RoW Total
GBPm(1) GBPm(1) GBPm(1) GBPm(1) GBPm(1)
Retail sales 473.9 119.5 294.0 232.5 1,119.9
Delivery receipts 11.5 3.7 5.1 5.4 25.7
Third party revenues 4.4 0.8 - - 5.2
Internal revenues - - 0.3 3.1 3.4
-------- -------- -------- -------- --------
Total segment revenue 489.8 124.0 299.4 241.0 1,154.2
Eliminations - - (0.3) (3.1) (3.4)
-------- -------- -------- -------- --------
Total revenue 489.8 124.0 299.1 237.9 1,150.8
Cost of sales (260.7) (49.3) (151.8) (114.2) (576.0)
-------- -------- -------- -------- --------
Gross profit 229.1 74.7 147.3 123.7 574.8
Distribution expenses (52.8) (38.4) (40.8) (36.7) (168.7)
-------- -------- -------- -------- --------
Segment result 176.3 36.3 106.5 87.0 406.1
Administrative expenses (365.1)
Net other income 6.3
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Operating profit 47.3
Finance income 0.3
Finance expense (0.1)
--------
Profit before tax 47.5
========
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.
There are no material non-current assets located outside the
UK.
(1) All numbers subject to rounding
4. Other income
Other income recognised during the six months ended 28 February
2015 and the year to 31 August 2015 related to final business
interruption reimbursements as a result of the fire in our main
distribution hub in June 2014.
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Other income - 6.3 6.3
================= ================ ===========
5. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of the parent company by the weighted
average number of ordinary shares in issue during the year. Own
shares held by the Employee Benefit Trust and Capita Trust are
eliminated from the weighted average number of ordinary shares.
Diluted earnings per share is calculated by dividing the profit
attributable to the owners of the parent company by the weighted
average number of ordinary shares in issue during the period,
adjusted for the effects of potentially dilutive share options.
Adjusted basic and diluted earnings per share removes the
one-off increase in the Group's effective tax rate due to the
release of our deferred tax asset in relation to China as this
entity's losses will no longer be offset against future profits.
Excluding this impact of China, the effective tax rate for the rest
of the Group would have been 20.7%.
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
No. of shares No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue
for basic earnings per share 82,967,753 82,921,082 82,963,517
Weighted average effect of dilutive
options 15,015 64,978 70,742
---------------- ---------------- --------------
Weighted average shares in issue
for diluted earnings per share 82,982,768 82,986,060 83,034,259
================ ================ ==============
Six months Six months Year to
to 29 February to 28 February 31
2016 2015 August
2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Earnings
Earnings attributable to owners of
the parent 15.2 14.6 36.9
Adjusted earnings attributable to 16.8 - -
owners of the parent
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
Pence(1) Pence(1) Pence(1)
Earnings per share
Basic earnings per share 18.3 17.6 44.4
Diluted earnings per share 18.3 17.6 44.4
================= ================= =================
Adjusted earnings per share
Basic adjusted earnings per share 20.3 17.6 44.4
Diluted adjusted earnings per share 20.3 17.6 44.4
================= ================= =================
(1) All numbers subject to rounding
6. Reconciliation of cash and cash equivalents
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Net movement in cash and cash equivalents 16.2 (9.4) 43.9
Opening cash and cash equivalents 119.2 74.3 74.3
Effect of exchange rates on cash
and cash equivalents 0.5 - 1.0
---------------- ---------------- -----------
Closing cash and cash equivalents 135.9 64.9 119.2
================ ================ ===========
The Group has a GBP20m revolving loan credit facility which
includes an ancillary GBP10m guaranteed overdraft facility and
which is available until October 2018. We expect to renegotiate
this loan facility during the second half of the year.
7. Capital expenditure and commitments
During the period, the Group acquired property, plant and
equipment of GBP7.7m and intangible assets of GBP26.5m. Disposals
were immaterial. At the period end capital commitments contracted,
but not provided for by the Group, amounted to GBP8.1m.
8. Financial instruments
There are no changes to the categories of financial instruments
held by the Group.
Six months Six months Year to
to 29 February to 28 February 31 August
2016 2015 2015
(unaudited) (unaudited) (audited)
GBPm(1) GBPm(1) GBPm(1)
Financial assets
Loans and receivables(1) 149.0 75.6 129.2
Financial assets at fair value through
profit and loss - 12.3 6.3
================ ================ ===========
Financial liabilities
Financial liabilities at fair value (36.9) - -
through profit and loss
Amortised cost(2) (248.5) (165.2) (228.5)
================ ================ ===========
(1) Loans and receivables include trade and other receivables
and cash and cash equivalents, and excludes prepayments.
(2) Included in financial liabilities at amortised cost are
trade payables, accruals and other payables.
The Group operates internationally and is therefore exposed to
foreign currency transaction risk, primarily on sales denominated
in US dollars, Euros and Australian dollars. The Group's policy is
to mitigate foreign currency transaction exposures where possible
and the Group uses financial instruments in the form of forward
foreign exchange contracts to hedge future highly probable foreign
currency cash flows.
These forward foreign exchange contracts are classified above as
derivative financial assets and are classified as Level 2 financial
instruments under IFRS 13, "Fair Value Measurement." They have been
fair valued at 29 February 2016 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
29 February 2016 and a net unrealised loss of GBP43.2m (H1 2015:
gain of GBP10.1m) was recognised in equity. All derivative
financial assets at 29 February 2016 mature within two years based
on the related contractual arrangements.
(1) All numbers subject to rounding
9. Related Parties
The Group's related parties are the Employee Benefit Trust,
Capita Trust and key management personnel. There have been no
material changes to the Group's related party transactions during
the six months to 29 February 2016.
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10. Contingent Liabilities
From time to time, the Group is subject to various legal
proceedings and claims that arise in the ordinary course of
business which, due to the fast growing nature of the Group and its
e-commerce base, may concern the Group's brand and trading name or
its product designs. As at 29 February 2016, these include
long-running proceedings with Assos of Switzerland SA, a Swiss
manufacturer of high performance, technical cycling apparel and
accessories. 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 29 February 2016, there were no pending
claims or proceedings against the Group which were expected to have
a material adverse effect on its liquidity or operations.
At 29 February 2016, the Group had contingent liabilities of
GBP3.8m (H1 2015: GBP4.7m) in relation to supplier standby letters
of credit, rent deposit deeds and other bank guarantees. The
likelihood of cash outflow in relation to these contingent
liabilities is considered to be low.
11. Subsequent Events
Following a strategic review, we have decided to discontinue our
China in-country operation over the coming months. It is estimated
that the financial impacts of this decision are one-off closure
costs of up to GBP10m, of which the majority will be non-cash, and
operating losses for the current financial year of c.GBP4m. Both of
these amounts are pre-tax and will be presented as discontinued
operations at the year end.
Independent review report to ASOS PLC
Report on the condensed unaudited financial information
Our conclusion
We have reviewed ASOS plc's condensed unaudited financial
information (the "interim financial statements") in the half-yearly
report of ASOS plc for the 6 month period ended 29 February 2016.
Based on our review, nothing has come to our attention that causes
us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the AIM Rules for
Companies.
What we have reviewed
The interim financial statements comprise:
-- the condensed unaudited consolidated statement of financial
position as at 29 February 2016;
-- the condensed unaudited consolidated statement of total
comprehensive income for the period then ended;
-- the condensed unaudited consolidated statement of cash flows for the period then ended;
-- the condensed unaudited consolidated statement of changes in
equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly
report have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union and the AIM Rules for Companies.
As disclosed in Note 1 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The half-yearly report, including the interim financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
half-yearly report in accordance with the AIM Rules for Companies
which require that the financial information must be presented and
prepared in a form consistent with that which will be adopted in
the company's annual financial statements.
Our responsibility is to express a conclusion on the interim
financial statements in the half-yearly report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the AIM
Rules for Companies and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the half-yearly
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
11 April 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFLFWFFMSELL
(END) Dow Jones Newswires
April 12, 2016 02:00 ET (06:00 GMT)
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