TIDMASC
RNS Number : 4477B
ASOS PLC
04 April 2017
4 April 2017
ASOS plc
Global Online Fashion Destination
Interim Results for the six months ended 28 February 2017
Summary results
Six months Six months CCY(3)
GBPm(1) to to 29 February Change Change
28 February 2016(2)
2017
----------------------------- ------------- ---------------- --------- --------
Group revenues(4) 911.5 663.1 37% 31%
Retail sales 889.2 644.6 38% 31%
UK retail sales 340.8 289.5 18% 18%
International retail sales 548.4 355.1 54% 42%
Gross profit 440.1 324.0 36%
--------
Retail gross margin 47.0% 47.4% (40bps)
Gross margin 48.3% 48.9% (60bps)
Profit before tax 27.3 23.9 14%
Diluted earnings per share 26.3p 22.8p 15%
Cash and cash equivalents 154.3 135.9 14%
----------------------------- ------------- ---------------- --------- --------
(1) All numbers subject to rounding throughout this document
(2) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
(3) Constant currency is calculated to take account of hedged
rate movements on hedged sales and spot rate movements on unhedged
sales
(4) Includes retail sales, delivery receipts and third party
revenues
Highlights include:
-- Retail sales grew strongly at +38% on a reported basis and +31% on a constant currency basis
-- Solid UK growth of +18% in a more promotional market
-- Accelerated international performance with reported sales
growth at +54% (constant currency: +42%) aided by the reinvestment
of the FX tailwind
-- Retail gross margin down 40bps on prior year in line with plan
-- Continued engagement from our customers with active
customers(5) +29%, average basket value +3% and average order
frequency(6) +4%
-- Total orders shipped were 23.3m, +33% year on year
-- Transition to Eurohub 2 warehouse on track, US warehouse plans progressing
-- Strong cash position of GBP154.3m; supporting growth and enabling business investment
(5) Defined as having shopped in the last twelve months as at 28
February 2017
(6) Calculated as last twelve months' total orders divided by
active customers
Guidance:
-- Medium term reported sales growth guidance remains unchanged at c.20-25% p.a.
-- Current financial year reported sales growth guidance revised to c.30-35%
-- Full Year PBT anticipated to be broadly in line with market consensus(7)
-- Capital expenditure guidance remains unchanged at GBP150-170m for the current financial year
(7) Company compiled PBT market consensus for FY 2017: range
GBP72m-GBP84.5m, mid-point GBP78.25m, mean GBP80.6m
Nick Beighton, CEO, commented:
"These are a strong set of results, showing great progress
across the business. International growth of 54% has been excellent
and with the Rest of the World segment a stand out performer.
Customer acquisition, up 29%, takes our active customers to over
14m. We passed the 5m active customer mark in the UK, where we have
shown solid sales growth of 18% in a more promotional market. We've
accelerated our significant infrastructure and technology projects
which remain on track, and Eurohub 2 went live in March.
Given the current momentum we are seeing, ASOS is making good
progress towards its ultimate goal of becoming the world's no. 1
destination for fashion-loving 20-somethings."
Investor and Analyst Meeting
There will be a meeting for analysts that will take place at
9.30am today, 4 April 2017, 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 Guy Scarborough at
Instinctif Partners on either 020 7457 2047 or
guy.scarborough@instinctif.com.
For further information:
ASOS plc
Nick Beighton, Chief Executive Tel: 020 7756 1000
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 / Guy Scarborough
JPMorgan Cazenove
Tel: 020 7742 4000
Michael Wentworth-Stanley / Caroline
Thomlinson
Numis Securities
Tel: 020 7260 1000
Alex Ham / Luke Bordewich
Forward looking statements:
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements" (including words such as
"believe", "expect", "estimate", "intend", "anticipate" and words
of similar meaning). By their nature, forward-looking statements
involve risk and uncertainty since they relate to future events and
circumstances, and actual results may, and often do, differ
materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with
respect to future events as at the date of this announcement. Save
as required by applicable law, the Company undertakes no obligation
to publicly revise any forward-looking statements in this
announcement, whether following any change in its expectations or
to reflect events or circumstances after the date of this
announcement.
Background note
ASOS is a global fashion destination for 20-somethings. 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 85,000 branded and own-label products through
localised mobile and web experiences, delivering from our
fulfilment centres in the UK, US and Europe to almost every country
in the world.
We tailor the mix of own-label, global and local brands sold
through each of our eight local language websites: UK, US, France,
Germany, Spain, Italy, Australia and Russia.
ASOS's websites attracted 127 million visits during February
2017 (February 2016: 106 million) and as at 28 February 2017 it had
14.1 million active customers(1) (29 February 2016: 10.9 million),
of which 5.0 million were located in the UK and 9.1 million were
located in our international territories (29 February 2016: 4.3
million in the UK and 6.6 million internationally).
(1) Defined as having shopped in the last twelve months as at 28
February 2017
Business Review
The Group has delivered a strong set of results for the six
months to 28 February 2017 with retail sales growth of 38% to
GBP889.2m (H1 2016: GBP644.6m), once again driven by great product
at relevant prices coupled with excellent delivery propositions and
engaging content. As a net exporter, sterling weakness has created
a FX tailwind for the business which has enabled investment above
previously planned levels into both price and proposition. As a
result, UK sales grew by 18% during the period in a highly
promotional market coupled with 54% across the international
territories, with an invigorated Rest of World segment being a
stand out performer.
The Group gross retail margin decreased by 40bps to 47.0% (H1
2016: 47.4%) as we further invested into international price
coupled with prior year price investments yet to annualise,
particularly in the EU. Additionally, investments into our UK
A-List loyalty scheme did not annualise until the end of February
2017. The combined impact of these investments was partially offset
by our trading stance which focuses on driving higher full price
sales mix and hence shallower markdown of clearance stock. Delivery
receipts grew by 21%, less than the retail sales growth, despite
the continued successful expansion of Premier delivery globally, as
more customers took advantage of faster free standard shipping
options. Third-party revenues increased by 15% during the period.
Consequently, the Group gross margin reduced 60bps during the
period to 48.3% (H1 2016: 48.9%).
As anticipated, profit before tax grew by 14% to GBP27.3m (H1
2016: GBP23.9m, restated to exclude the China loss before tax of
GBP2.7m).
The Eurohub 2 site was handed over to us on 29 September 2016
and relocation to this new facility was completed at the beginning
of March 2017 in line with plan. The ramp up of activity has now
commenced.
Great fashion, great price
Our goal has always been to offer 'the greatest possible choice
of relevant fashion at the right price whatever your shape or
size'. We focus on the best curated edit of third party brands
together with the ASOS Brand itself, which combine to give our
20-something customers the most creative, relevant and exciting
choice of fashion available anywhere. Over 4,500 new styles are
launched each and every week, with over 85,000 different products
in stock at any one point in time.
During the period, we launched our Activewear collection.
Initially this has focused on product extensions with existing
brand partners including Nike, Adidas, Puma & Reebok, alongside
the sportswear collections of some better known fashion brands such
as Ted Baker, New Look, Free People & Missguided. The ASOS
Activewear collection will launch later this year, priced alongside
the core own-label ranges. Performance fabrics and technical
constructions will be included to cater for training, running,
dance and yoga with further extensions to the range at a later
point.
We continue to work with third party brands to ensure the most
relevant edit of collections for the season, from collaborating
with some of the largest global retailers on exclusive colours and
prints to new and emerging brands. We increasingly utilise social
networks, ASOS Marketplace and our new Fashion Discovery Project to
help us remain at the leading edge of young fashion globally.
The branded portfolio is continually refreshed. This season
alone we have added 100 new brands whilst removing a similar number
from the portfolio. New brands include well recognised names such
as Under Armour, Miss Selfridge and Burton in addition to locally
sourced, vibrant new brands such as Adolescent Clothing, RVCA,
Current Air, EFLA and many more. Exclusive collaborations have
continued with ASOS White x Saucony, ASOS x WAH London and the ASOS
x House of Holland for Centrepoint. These exclusive collaborations,
when combined with ASOS own-label products, results in 60% of all
sales on our platform being exclusive to ASOS customers.
We are on record as saying that ethically sourcing our product
throughout the supply chain is not optional. It is a business
imperative for ASOS and indeed our industry. Our 20-something
customers care deeply about social issues such as ethics in fashion
and the next generation will care even more. This is also highly
relevant to our shareholders. We have initiated a wide-reaching
plan to drive Fashion with Integrity throughout our business. The
programme includes consolidating our supply base to give us better
visibility of working practices, zero tolerance of abuse of
workers, particularly children, greater transparency of our supply
base and tighter scrutiny of environmental issues where our
products originate.
Awesome on mobile
Our focus on being 'awesome on mobile' continues, aiming to
deliver the most enjoyable and frictionless shopping experience.
The roll-out of the New Mobile Checkout on all ASOS digital
channels has been successfully completed. We now offer a
cutting-edge customer experience designed and developed with a
mobile-first approach, using the latest technologies to provide a
new, seamless checkout experience for our customers. Both Android
and iOS apps continue to attract c.5 star ratings; testament to the
excellent work the ASOS mobile team is delivering.
Over the last six months, daily app downloads have seen a 28%
increase. Our customers have visited the apps eight times a month
on average, spending more than 80 minutes during this time. Mobile
visits are now c.70% (H1 2016: c.60%) of total traffic and 58% (H1
2016: 51%) of orders are placed from a mobile device.
Over the coming months we will be launching a series of updates
for the ASOS Android App featuring a refreshed customer experience
blending the best of the Google UX guidelines and our unique ASOS
shopping experience. Additionally, Apple Pay will be launched on
both iOS App and Mobile Web. Finally, a refreshed 'My Account'
section will be introduced to enable customers to seamlessly find
their order history, delivery and returns updates and A-List
dashboards all in one place.
Engaging content and experience
We continue to invest in engaging our customers with a
multi-channel approach, producing significant quantities of content
and experiences to enrich our product offering and help communicate
our brand in an emotionally engaging way.
Across social channels, which are ever more important in
connecting with our 20-something audience in a credible way, we
continue to see growth in followers and engagement levels. Our
global audience has grown by 25% to 21.3m followers in the last six
months.
We have again achieved improvements in our customer engagement
levels. This includes growth in visits of 27% year on year, 4%
growth in average order frequency, 3% growth in average basket
value and 10bps improvement in our conversion rates. Active
customers are now at 14.1m, representing a 29% increase since last
year and we have now passed the 5m mark in UK active customers.
We have also cemented our position as early adopters of emerging
content formats such as shoppable Instagram stories, Instagram
Live, Facebook Live, Facebook Canvas and Snapchat lenses across key
channels, enabling us to connect with our audience in a way that
feels fresh and evolves as quickly as the platforms themselves.
There has been encouraging results, with 100,000 views per
video/broadcast produced, reaching 32m people with the ASOS
Snapchat Black Friday lense, and engaging more than 13m people
across the US and the UK with the launch of Instagram Stories
advertising.
We have also continued the roll-out of the ASOS magazine to more
customers, with the US version (containing bespoke content as well
as global stories) launching to 100,000 readers in November 2016.
As well as the UK, the magazine is now available in France, Germany
and the US. The ASOS magazine remains the highest circulation
fashion magazine in the UK.
The ASOS A-List loyalty programme has completed its first year.
In the last six months a new dashboard has been developed enabling
customers to more easily track their tier status and loyalty points
on product pages are now in test. This programme continues to be
tested and refined, including customer reward levels, different
ways to earn points and different delivery options at checkout.
Best-in-class service
Our customers continue to have high expectations of service
levels and we strive to offer a friction-free online shopping
experience, every time.
Delivery and returns
Continually enhancing the range of delivery and returns options
enables us to move towards our goal of providing a best-in-class
customer proposition. We have continued to develop the offer at
pace, with over 100 improvements rolled out over the last six
months.
In the UK, enhancements included improving the standard delivery
proposition from four to three days and completing the Click &
Collect roll-out to all Doddle locations.
Internationally, our free returns proposition was extended,
launching in Hong Kong, New Zealand and Switzerland. We are always
looking to improve standard delivery and now all orders to
Switzerland, Finland, Slovakia and Slovenia are being sent using a
fully tracked solution. In addition, we launched a tracked standard
mail solution to a further 10 countries.
Enhanced delivery notifications and in-flight delivery options
have been added across multiple providers, including SMS updates
for our Australian customers, and DHL on Demand services across 22
European next-day delivery lanes.
Standard delivery lead times were improved in 76 countries and
express delivery was accelerated in a further 11 countries. A
delivered duty paid solution was also launched into Switzerland so
that customers no longer have to pay import duty.
Next-day deliver-to-store was launched in Denmark, and over the
next six months we will continue to increase deliver-to-store
options in both the UK and internationally, providing customers
with further choice and flexibility when collecting their
orders.
Customer Care
Providing help and support to our customers throughout their
ASOS journey is essential to delivering a best-in-class service. We
continue to provide support across social media, live chat, email
and telephony. This service is delivered 24/7, 365 days a year
across key local languages to our English, French, German, Spanish,
Italian and Russian customers, with local language speaking support
also available in Dutch, Korean and Mandarin. We have maintained
strong service levels during the first half of the year, responding
to all emails within one hour, all social media communications from
customers within 15 minutes and all live chat or telephony within
30 seconds.
Over the last six months there has been continued investment
into both our people and our technical capabilities to enhance the
level and quality of the service. During the year, we made further
investments in upgrading the self-serve functionality for
customers, improved the live chat offering on both desktop and
mobile, and introduced Facebook Messenger as a contact channel for
all key markets.
Finally, we have continued to invest in the capacity and
infrastructure that allows us to grow our in-house Customer Care
capabilities in line with our growth. To meet these demands, the
decision was made to relocate from our current Customer Care site
in Hemel Hempstead to a new 80,000 square feet Customer Care site
in Leavesden, North Watford, which will allow us to provide a
best-in-class customer service at scale. The aim is to have
completed this transition by the end of this calendar year.
Logistics
UK
During the first half of this year a second despatch sorter was
added in Barnsley and assisted the operation in setting new
despatch records during the Black Friday promotional event. The new
inbound conveyors also allowed for additional intake and throughput
capability.
Our investment at Barnsley continues, with a fifth packing
module currently being installed and due to be operational by the
end of the financial year in readiness for the peak trading period.
This will provide us with additional capacity to support future
growth. Work continues on expanding Barnsley in the second half of
this year, enhancing the current facilities for the people who work
there as well as providing additional office space.
XPO are the partner who operate our Barnsley facility. They
recently entered into a voluntary recognition agreement with the
Community Union on two of their sites, which included the warehouse
in Barnsley. We fully support their decision.
International
In the first week of March 2017 we transitioned over 2m units of
stock from the existing Eurohub 1 facility just outside of Berlin
to the brand new purpose designed and built fulfilment centre,
known as Eurohub 2. The phase 1 build of Eurohub 2 is now
operational and one off transition costs will be included within
operating costs in the second half of the year. To date these are
running in line with plan. The warehouse has more than doubled our
stockholding capacity in Continental Europe and almost quadrupled
throughput capacity, as well as providing greater capability and
opportunity to improve the customer proposition further.
Over the next three months, operations will continue to ramp up
in Eurohub 2 with the receipt of stock and shipping of orders,
which will reduce the need to transfer stock between warehouses and
ultimately prepare us for the first phase of Global Fulfilment.
This programme will enable us to fulfil 100% of orders to Germany,
France, Spain and Italy from Eurohub 2 compared to the previous
c.50% fulfilment levels from Eurohub 1.
In parallel to Phase 1 continuing to ramp up, a ground breaking
ceremony launched Phase 2 last month. Once completed, this will
double the square footage of the fulfilment centre in preparation
for automation in FY 2018.
Our US operation continues to fulfil around 25% of all US
orders, with the remainder being despatched from the UK. As our
third largest market we are looking to gain efficiencies in both
cost and time to serve current and future US customers. We have
recently undertaken an extensive network modelling exercise, based
on total landed cost (supply) and optimised customer service goals
(demand/service offer), in order to identify the optimal location
for our US fulfilment centre. We expect to have decided on that
location very shortly and for a site to be quickly identified
thereafter.
Technology
Over the course of the last six months we have made significant
progress with our technology. Specifically we completed and rolled
out our new digital platform across all territories, ahead of plan
and the Black Friday peak trading period. Our new platform is the
backbone of our entire customer experience on our site and apps; it
is fast, it is reliable and it is flexible. The new platform
delivers our micro-service architecture with fully native mobile
checkouts in our android and iOS apps, and a vastly improved
checkout on desktop and mobile web. Our new platform handled record
volumes of transactions during our peak trading period which at one
point reached 33 orders per second.
A critical strategy behind our new platform was to enable our
future flexibility to deliver technological change and innovation
at pace. During H1 2017, we rolled out over 600 releases across our
platform compared to 340 in H2 2016. This has exceeded our
expectations and apart from the sheer pace of innovation this
implies, demonstrates the flexibility of our new platform. We
delivered new capabilities for our customers, including rolling out
Klarna payments in Norway, Sweden and Finland, Premier in Spain and
Italy, switching the Australian acquiring service to improve
stability and service continuity as well as improving the quality
of our video and image zoom functionality.
We have also completed the development of our fulfilment
software changes and the technology needed to open the new EuroHub
2 fulfilment centre. The new fulfilment software is a major change
and will allow us to control which country sites have access to
which stock pools as well as improve our delivery proposition for
each of these countries over the course of this financial year.
We continued to make good progress with our major transformation
programmes including a new end-to-end merchandising and planning
system for our retail teams ('Truly Global Retail') and a new
finance system; both of which will support our ability to buy, sell
and account for stock in multiple locations and currencies. We will
start to see the first output from these programmes later this
financial year with a new clearance optimisation tool for our
retail teams. In addition to these programmes, we have now
mobilised a programme to replace our people systems and support how
we invest in and develop our critical talent in the business.
Over the next six months, we will continue to evolve and
innovate our digital platform including personalising our
customers' experience across our sites and improving navigation and
order tracking. To further drive our global reach, we will also
launch new payment methods, sites, delivery propositions and
languages. This is in addition to upgrading the 'My Account'
section and refreshing the android app. Finally, our
personalisation team are exploring how machine learning and
artificial intelligence can continue to help us drive these
capabilities further.
We are increasing our investment in customer data and systems
that give us faster information on what our customers think of
ASOS, including a 360 view of our customer, online customer
feedback and specific research tools. We will also continue to
drive forward the multi-year transformation programmes focused on
enhancing internal capabilities across finance, retail and people
teams as well as make the technology infrastructure investments in
our new office and Customer Care centre.
Outlook
During H1 2017, sterling weakness and the resulting FX benefits
have enabled investment into both price and proposition above
previously planned levels. As a result, reported sales growth is
now expected to be in the 30-35% range for this financial year
only, driven by an acceleration in international performance. Over
time, this growth will normalise and hence our medium term reported
sales growth expectation of 20-25% remains in place.
Notwithstanding continued reinvestment of the FX benefit, together
with the transition costs into the new Eurohub 2 facility, sourcing
inflation and a number of other structural cost headwinds, we
expect to deliver PBT broadly in line with market consensus.
Nick Beighton Helen Ashton
Chief Executive Officer Chief Financial Officer
Financial review
Revenue
Six months to 28 February
2017 Group International
GBPm(1) total UK US EU RoW total
------------------------------ ------ ------ ------ ------ ------- --------------
Retail sales 889.2 340.8 124.3 248.9 175.2 548.4
Growth 38% 18% 62% 48% 59% 54%
Growth at constant exchange
rate 31% 18% 39% 36% 53% 42%
Delivery receipts 19.3 7.6 2.9 4.9 3.9 11.7
Growth 21% 6% 7% 53% 39% 34%
Third party revenues 3.0 2.9 0.1 - - 0.1
Growth 15% 21% - - (100%) (50%)
Total revenues 911.5 351.3 127.3 253.8 179.1 560.2
Growth 37% 17% 60% 48% 58% 54%
Growth at constant exchange
rate 31% 17% 38% 36% 52% 41%
------------------------------ ------ ------ ------ ------ ------- --------------
(1) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
The Group generated retail sales growth of 38% during the
period. This was driven by 54% growth in our international markets
(42% in constant currency) as we continued to invest in price and
proposition, coupled with 18% growth in the UK. International
retail sales now account for 62% (H1 2016: 55%) of total retail
sales.
While we continued to see a more promotional market in the UK
during the period, we retained our first place position for unique
visitors to apparel retailers in the 15-34 age range (Comscore,
January 2017). We also saw increases in average order frequency and
conversion, driven in part by engagement in the A-List loyalty
scheme.
US retail sales grew by 62% (39% in constant currency) fuelled
by increases in conversion and average basket sizes following
further price investments and improved delivery speeds.
EU retail sales grew by 48% (36% in constant currency)
benefiting from continued price investments and expansion of
proposition offers, including EU free returns that are yet to
annualise.
Rest of World retail sales accelerated materially growing 59%
(53% in constant currency) during the half, augmented by further
price and proposition investments. Russia was a stand out performer
with over 200% reported sales growth during the period.
Delivery receipts grew by 21%, less than retail sales growth,
despite the continued successful expansion of Premier globally and
launch of this programme in Italy and Spain, as more customers took
advantage of faster free standard shipping options. Third party
revenues increased by 15% as we undertook more marketing campaigns
with third party brands.
Customer engagement
We have seen significant growth in active customers, exiting the
half with 14.1m active customers(1) , an increase of 29% on the
comparative period. Average basket value increased by 3%, driven by
strong full price sales mix in all segments. Conversion(2)
increased by 10bps and average order frequency(3) increased by 4%,
both reflecting the compelling nature of our proposition.
Six months Six months Change
to 28 February to 29 February
2017 2016
--------------------------------- ---------------- ---------------- -------
Active customers(1) (m) 14.1 10.9 29%
Average basket value (including
VAT) GBP70.86 GBP68.86 3%
Average units per basket 2.76 2.70 2%
Average selling price per unit
(including VAT) GBP25.69 GBP25.51 1%
Average order frequency(3) 3.15 3.02 4%
Total orders (m) 23.3 17.5 33%
Total visits (m) 804.8 634.0 27%
Conversion(2) 2.9% 2.8% 10bps
--------------------------------- ---------------- ---------------- -------
(1) Defined as having shopped during the last twelve months as
at 28 February 2017
(2) Calculated as total orders divided by total visits
(3) Calculated as last twelve months' total orders divided by
active customers
Gross profitability
Six months to 28 February
2017 Group International
GBPm(1) total UK US EU RoW Total
--------------------------- -------- ------ --------- ------ --------------
Gross profit 440.1 155.6 76.9 115.2 92.4 284.5
Growth 36% 12% 61% 45% 58% 54%
Retail gross margin 47.0% 42.6% 59.5% 44.3% 50.5% 49.7%
Growth (40bps) (200bps) 90bps (100bps) 20bps -
Gross margin 48.3% 44.3% 60.4% 45.4% 51.6% 50.8%
Growth (60bps) (210bps) 40bps (90bps) 10bps (10bps)
--------------------------- -------- --------- ------ --------- ------ --------------
(1) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
Group retail gross margin decreased by 40bps to 47.0% (H1 2016:
47.4%) as we are yet to annualise prior year price investments,
particularly in the EU, alongside further international price
investments in the current financial year. In the UK, our A-List
loyalty scheme did not annualise until the end of February 2017.
The combined impact of these margin investments was partly offset
by higher full price sales mix and shallower markdown of clearance
stock.
Gross margin (including third-party revenues and delivery
receipts) decreased by 60bps to 48.3% (H1 2016: 48.9%) as more
customers took advantage of our faster free standard shipping
options at the expense of paid-for delivery solutions, particularly
in the UK and the US.
Operating expenses
The Group increased its investment in operating resources by 38%
to GBP413.0m, retaining a 45.3% operating cost ratio in line with
last year.
Six months
Six months to to
28 February 29 February
GBPm 2017 2016(1) Change
------------------------------- -------------- ------------- -------
Distribution costs (140.2) (97.2) (44%)
Payroll and staff costs(2) (74.1) (60.6) (22%)
Warehousing (74.3) (52.8) (41%)
Marketing (48.1) (34.2) (41%)
Production (3.6) (2.9) (24%)
Technology costs (16.4) (11.8) (39%)
Other operating costs (34.8) (26.0) (34%)
Depreciation and amortisation (21.5) (14.8) (45%)
------------------------------- -------------- ------------- -------
Total operating costs (413.0) (300.3) (38%)
Operating cost ratio (% of
sales) 45.3% 45.3% -
------------------------------- -------------- ------------- -------
(1) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
(2) Inclusive of GBP3.4m non-cash share based payment charges
(H1 2016: GBP1.6m)
Distribution costs increased by 70bps to 15.4% of sales, driven
by increased international order mix, expansion of faster delivery
propositions and free returns options compared to last half year,
as well as moving standard deliveries from untracked to tracked
services in many territories.
Payroll and staff costs decreased by 100bps to 8.1% of sales due
to headcount growth of 33% being slower than reported sales growth
(H1 2017: 3,146; H1 2016(3) : 2,363). Non-cash share-based payment
charges included within this cost line amounted to GBP3.4m (H1
2016: GBP1.6m) as we made the third grant to senior management
under our Long-Term Incentive Scheme during the period.
Warehousing costs increased by 20bps to 8.2% of sales due to an
increased Eurohub 1 fulfilment mix, which is currently a less
efficient manual operation, offset in part by productivity
improvements at Barnsley driven by continued investment in
automation technology.
Marketing costs marginally increased by 10bps to 5.3% of
sales.
Other operating costs decreased by 10bps to 3.8% of sales due to
the fixed nature of some of these costs, such as occupancy, legal
and insurance costs. The leveraging of these costs as a percentage
of sales was offset by increases in transaction costs, which grew
in line with volume growth.
Depreciation increased by 10bps to 2.3% of sales following
increased capital expenditure in recent financial years in our
warehouse and IT infrastructure.
(3) Restated to remove the headcount relating to discontinued
operations in China
Discontinued operations
In May 2016, the group discontinued its in-country operations in
China and hence all comparatives have been restated to exclude its
loss before tax of GBP2.7m during the six months to 29 February
2016.
Income statement
The Group generated profit before tax of GBP27.3m, up 14%
compared to last year (H1 2016: GBP23.9m), lower than sales growth
due to gross margin investment of 60bps while operating costs
remained a constant percentage of sales year on year.
Six months Six months
to 28 February to
2017 29 February
GBPm 2016(1) Change
---------------------------------------------- ---------------- ------------- -------
Revenue 911.5 663.1 37%
Cost of sales (471.4) (339.1) 39%
---------------------------------------------- ---------------- ------------- -------
Gross profit 440.1 324.0 36%
Distribution expenses (140.2) (97.2) (44%)
Administrative expenses (272.8) (203.1) (34%)
Operating profit 27.1 23.7 14%
Net finance income 0.2 0.2
---------------------------------------------- ---------------- ------------- -------
Profit before tax from continuing operations 27.3 23.9 14%
Income tax expense (5.4) (5.0)
Profit after tax from continuing operations 21.9 18.9 16%
Loss before tax from discontinued operations - (2.7)
Tax from discontinued operations - (1.0)
---------------------------------------------- ---------------- ------------- -------
Profit after tax from discontinued
operations - (3.7)
---------------------------------------------- ---------------- ------------- -------
Profit for the year attributable to
owners of the parent company 21.9 15.2 44%
---------------------------------------------- ---------------- ------------- -------
(1) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
Taxation
The effective tax rate decreased by 110bps to 19.8% (H1 2016:
20.9%) due to prior year tax adjustments and a decline in
prevailing UK corporation tax rates, adjusted to reflect our
financial year end. 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 16% and 15% to
26.4p and 26.3p respectively (H1 2016: 22.8p) due to the increase
in profit after tax during the period.
Statement of financial position
The Group continues to enjoy a strong financial position
including a closing cash balance of GBP154.3m (31 August 2016:
GBP173.3m). The reduction in cash includes the payment of last
year's GBP20.2m legal settlement in relation to trademark
infringement disputes with Assos of Switzerland GmbH and Anson's
Herrenhaus KG. Therefore, on an underlying basis the Group was
broadly cash flow neutral for the period.
Net assets increased by GBP47.4m to GBP247.8m during the period
(31 August 2016: GBP200.4m) driven principally by continued capital
expenditure. The reduction in cash following the legal settlement
payment was more than offset by a reduction of GBP27.4m in the fair
value liability position of our outstanding forward contracts since
31 August 2016 due to hedges, which were entered into pre-Brexit at
adverse rates, settling during the period. We exited the half with
intentionally less stock than year-end as a result of the important
transition to Eurohub 2 at the start of March 2017; stock levels
have subsequently begun to rise again. A summary statement of
financial position is shown below.
At At
GBPm 28 February 2017 31 August 2016
-------------------------------------- ------------------ ----------------
Goodwill and other intangible assets 143.7 113.5
Property, plant and equipment 90.5 77.2
Deferred tax asset 7.9 13.3
-------------------------------------- ------------------ ----------------
Non-current assets 242.1 204.0
-------------------------------------- ------------------ ----------------
Inventories 249.0 257.7
Net current payables (342.1) (355.7)
Cash and cash equivalents 154.3 173.3
Derivative financial liabilities (48.6) (76.0)
Current tax liability (6.9) (2.9)
Net assets 247.8 200.4
-------------------------------------- ------------------ ----------------
Statement of cash flows
The Group's cash balance decreased by GBP19.0m to GBP154.3m
during the period (31 August 2016: GBP173.3m) as capital
expenditure of GBP62.4m was offset by a cash inflow from operating
activities of GBP42.2m, driven principally by EBITDA. The working
capital outflow of GBP7.7m includes payment of last year's GBP20.2m
legal settlement. Excluding this, underlying working capital inflow
was GBP12.5m due to lower closing stockholding as a result of the
transition to Eurohub 2 at the start of March 2017. A summary
statement of cash flows is shown below.
Six months to Six months to
GBPm 28 February 2017 29 February 2016
------------------------------------------------------- ------------------ ------------------
Operating profit from continuing operations 27.1 23.7
Loss before tax from discontinued operations - (2.7)
------------------------------------------------------- ------------------ ------------------
Operating profit 27.1 21.0
Depreciation and amortisation 21.5 14.9
Loss on disposal of non-current assets 0.1 -
Working capital (7.7) 14.1
Share-based payments charge 3.4 1.6
Other non-cash items (1.0) (0.3)
Tax paid (1.2) (3.5)
Cash inflow from operating activities 42.2 47.8
Capital expenditure (62.4) (31.9)
Net cash inflow relating to EBT(1) 0.6 -
Net finance income received 0.2 0.3
------------------------------------------------------- ------------------ ------------------
Total cash (outflow)/inflow (19.4) 16.2
Opening cash and cash equivalents 173.3 119.2
Effect of exchange rates on cash and cash equivalents 0.4 0.5
------------------------------------------------------- ------------------ ------------------
Closing cash and cash equivalents 154.3 135.9
------------------------------------------------------- ------------------ ------------------
(1) Employee Benefit Trust and Capita Trust
Fixed asset additions
Six months Six months
to to
28 February 29 February
GBPm 2017 2016
----------------------------- ------------- -------------
Technology 44.9 27.0
Warehouse 18.9 5.7
Office fixtures and fit-out 1.3 1.5
Total 65.1 34.2
----------------------------- ------------- -------------
We continue to invest in our warehousing and technology
infrastructure to support our future growth ambitions. The majority
of our technology 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 the build-out of Eurohub 2 and further
automation in Barnsley.
CONDENSED UNAUDITED Consolidated Statement of Total
Comprehensive Income
For the six months ended 28 February 2017
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016(1) 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
CONTINUING OPERATIONS
Revenue 911.5 663.1 1,444.9
Cost of sales (471.4) (339.1) (722.7)
----------------------------------------------- ---------------- ---------------- -----------
Gross profit 440.1 324.0 722.2
Distribution expenses (140.2) (97.2) (216.0)
Administrative expenses (272.8) (203.1) (464.1)
----------------------------------------------- ---------------- ---------------- -----------
Operating profit 27.1 23.7 42.1
Finance income 0.2 0.2 0.7
----------------------------------------------- ---------------- ---------------- -----------
Profit before tax from continuing operations
for the period 27.3 23.9 42.8
Income tax expense (5.4) (5.0) (8.1)
----------------------------------------------- ---------------- ---------------- -----------
Profit after tax from continuing operations
for the period 21.9 18.9 34.7
----------------------------------------------- ---------------- ---------------- -----------
DISCONTINUED OPERATIONS
Loss before tax from discontinued operations - (2.7) (10.1)
Tax from discontinued operations - (1.0) (0.2)
----------------------------------------------- ---------------- ---------------- -----------
Loss after tax from discontinued operations
for the period - (3.7) (10.3)
----------------------------------------------- ---------------- ---------------- -----------
Profit for the period attributable
to owners of the parent company 21.9 15.2 24.4
----------------------------------------------- ---------------- ---------------- -----------
Net translation movements offset in
reserves (0.9) (0.6) (1.4)
Fair value gain/(loss) on derivative
financial liabilities 27.4 (43.2) (82.3)
Income tax relating to these items (5.6) 8.4 16.2
----------------------------------------------- ---------------- ---------------- -----------
Other comprehensive gain/(loss) for
the period(2) 20.9 (35.4) (67.5)
----------------------------------------------- ---------------- ---------------- -----------
Total comprehensive gain/(loss) for
the period attributable to owners of
the parent company 42.8 (20.2) (43.1)
---------------------------------------------- ---------------- ---------------- -------------
Basic Earnings per share (Note 4)
From continuing operations 26.4p 22.8p 41.8p
From discontinued operations - (4.5p) (12.4p)
----------------------------------------------- ---------------- ---------------- -----------
Total 26.4p 18.3p 29.4p
----------------------------------------------- ---------------- ---------------- -----------
Diluted Earnings per share (Note 4)
From continuing operations 26.3p 22.8p 41.7p
From discontinued operations - (4.5p) (12.4p)
----------------------------------------------- ---------------- ---------------- -----------
Total 26.3p 18.3p 29.3p
----------------------------------------------- ---------------- ---------------- -----------
(1) For the six months to 29 February 2016, numbers have been restated
to remove the results of the discontinued operation in China
(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 28 February 2017
Equity
Employee attributable
Called Benefit to owners
up share Share Retained Trust Hedging Translation of the Non-controlling Total
capital premium earnings(1) reserve(2) reserve reserve parent interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 September
2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4 - 200.4
Profit for the
period - - 21.9 - - - 21.9 - 21.9
Other
comprehensive
income/(loss)
for
the period - - - - 21.8 (0.9) 20.9 - 20.9
------------ ------------ ------------ ------------ ------------ ------------ ------------- ---------------- ------------
Total
comprehensive
income/(loss)
for
the period - - 21.9 - 21.8 (0.9) 42.8 - 42.8
Net cash
received
on exercise
of shares
from EBT(2) - - - 0.6 - - 0.6 - 0.6
Transfer of
shares
from EBT(2)
on exercise - - (0.3) 0.3 - - - - -
Share-based
payments
charge - - 3.4 - - - 3.4 - 3.4
Deferred tax - - 0.6 - - - 0.6 - 0.6
At 28
February 2017 2.9 6.9 280.3 (1.7) (38.2) (2.4) 247.8 - 247.8
============ ============ ============ ============ ============ ============ ============= ================ ============
Equity
Employee attributable
Called Benefit to owners
up share Share Retained Trust Hedging Translation of the Non-controlling Total
capital premium earnings(1) reserve(2) reserve reserve parent interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(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(2) 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
============ ============ ============ ============ ============ ============ ============= ================ ============
Equity
Called Employee attributable
up Benefit to owners
share Share Retained Trust Hedging Translation of the Non-controlling Total
capital premium earnings(1) reserve(2) reserve reserve parent interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 September
2015 2.9 6.9 225.1 (3.6) 6.3 (0.3) 237.3 - 237.3
Profit for the
year - - 24.4 - - - 24.4 - 24.4
Other
comprehensive
loss for the
year - - - - (66.3) (1.2) (67.5) - (67.5)
-------- ---------- ------------ ----------- -------- ------------ ------------- ---------------- -------
Total
comprehensive
income/(loss)
for
the year - - 24.4 - (66.3) (1.2) (43.1) - (43.1)
Net cash
received
on exercise
of shares
from EBT(2) - - - 0.7 - - 0.7 - 0.7
Transfer of
shares
from EBT(2)
on exercise - - (0.3) 0.3 - - - - -
Share-based
payments
charge - - 5.0 - - - 5.0 - 5.0
Deferred tax
on
share options - - 0.5 - - - 0.5 - 0.5
Balance as at
31
August 2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4 - 200.4
======== ========== ============ =========== ======== ============ ============= ================ =======
(1) Retained earnings includes the share-based payments
reserve
(2) Employee Benefit Trust and Capita Trust
CONDENSED UNAUDITED Consolidated Statement of Financial
PositioN
At 28 February 2017
At At At
28 February 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Non-current assets
Goodwill 1.1 1.1 1.1
Other intangible assets (Note
5) 142.6 91.8 112.4
Property, plant and equipment
(Note 5) 90.5 66.9 77.2
Deferred tax asset 7.9 2.3 13.3
------------- ------------- -------------------
242.1 162.1 204.0
------------- ------------- -------------------
Current assets
Inventories 249.0 198.0 257.7
Trade and other receivables 24.9 23.2 15.0
Deferred tax asset - 0.9 -
Cash and cash equivalents (Note
6) 154.3 135.9 173.3
-------------
428.2 358.0 446.0
------------- ------------- -------------------
Current liabilities
Trade and other payables (367.0) (258.8) (370.7)
Derivative financial liabilities
(Note 7) (44.8) (25.3) (55.0)
Current tax liability (6.9) (5.2) (2.9)
(418.7) (289.3) (428.6)
------------- ------------- -------------------
Net current assets 9.5 68.7 17.4
-------------
Non-current liabilities
Derivative financial liabilities
(Note 7) (3.8) (11.6) (21.0)
(3.8) (11.6) (21.0)
------------- ------------- -------------------
Net assets 247.8 219.2 200.4
============= ============= ===================
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 (1.7) (3.4) (2.6)
Hedging reserve (38.2) (36.9) (60.0)
Translation reserve (2.4) (0.9) (1.5)
Retained earnings 280.3 250.6 254.7
Total equity 247.8 219.2 200.4
============= ============= ===================
CONDENSED UNAUDITED Consolidated Statement of Cash Flows
For the six months ended 28 February 2017
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Operating profit from continuing operations 27.1 23.7 42.1
Loss before tax from discontinued operations - (2.7) (10.1)
---------------- ---------------- -----------
Operating profit 27.1 21.0 32.0
Adjusted for:
Depreciation of property, plant and
equipment 5.7 5.1 10.5
Amortisation of other intangible assets 15.8 9.8 21.2
Loss on disposal of non-current assets
from continuing operations 0.1 - 0.8
Loss on disposal of non-current assets
from discontinued operations - - 4.3
Decrease/(increase) in inventories 8.7 (4.2) (63.8)
(Increase)/decrease in trade and other
receivables (10.3) (5.1) 4.2
(Decrease)/increase in trade and other
payables (6.1) 23.4 128.7
Share-based payments charge 3.4 1.6 4.5
Other non-cash items (1.0) (0.3) (1.7)
Income tax paid (1.2) (3.5) (10.0)
---------------- ---------------- -----------
Net cash generated from operating activities 42.2 47.8 130.7
Investing activities
Payments to acquire other intangible
assets (46.1) (23.3) (55.7)
Payments to acquire property, plant
and equipment (16.3) (8.6) (23.5)
Finance income 0.2 0.4 0.8
Net cash used in investing activities (62.2) (31.5) (78.4)
Financing activities
Net cash inflow relating to EBT(1) 0.6 - 0.7
Finance expense - (0.1) (0.1)
---------------- ---------------- -----------
Net cash generated/(used) in financing
activities 0.6 (0.1) 0.6
Net (decrease)/increase in cash and
cash equivalents (19.4) 16.2 52.9
---------------- ---------------- -----------
Opening cash and cash equivalents 173.3 119.2 119.2
Effect of exchange rates on cash and
cash equivalents 0.4 0.5 1.2
---------------- ---------------- -----------
Closing cash and cash equivalents 154.3 135.9 173.3
================ ================ ===========
(1) Employee Benefit Trust and Capita Trust
Notes to the CONDENSED UNAUDITED financial information
For the six months ended 28 February 2017
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 and Russia. 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 3 April 2017.
b) Basis of preparation
The interim financial statements for the six months ended 28
February 2017 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
2016, which has been prepared in accordance with IFRSs as adopted
by the European Union.
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 2016 have 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 and cash flows.
Going concern
The Directors have reviewed current performance and cash flow
forecasts, and are satisfied that the Group's forecasts and
projections, taking account of potential changes in trading
performance, show that the Group will be able to operate within the
level of its current facilities for the foreseeable future. The
Directors have therefore continued to adopt the going concern basis
in preparing the Group's financial statements.
Changes to accounting standards
Various new accounting standards and amendments were issued
during the period, none of which have had an impact in the current
period. The impact of new standards which are not yet effective are
currently under review by the Group, including IFRS 9 'Financial
Instruments, IFRS 15 'Revenue from Contracts with Customers' and
IFRS 16 'Leases'.
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 2016.
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 2017 to be unchanged from those set out
in the Annual Report and Accounts for the year ended 31 August
2016, summarised as follows:
- Technological risk including the ability to recover
sufficiently from loss of data, 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, understanding additional costs to meet ecommerce
drivers, 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, (b) the security of our customer and business
data, including unauthorised access to or breach of our systems and
records and (c) adhering to product quality or ethical trading
standards
- Reliance on key personnel
These are set out in detail on pages 20 to 24 of the Group's
Annual Report and Accounts for the year ended 31 August 2016, a
copy of which is available on the Group's website, www.asosplc.com.
Information on financial risk management is also detailed on pages
81 to 82 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 28 February 2017 (unaudited)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 340.8 124.3 248.9 175.2 889.2
Delivery receipts 7.6 2.9 4.9 3.9 19.3
Third party revenues 2.9 0.1 - - 3.0
---------- -------- --------- ------- ---------
Total segment revenue 351.3 127.3 253.8 179.1 911.5
Cost of sales (195.7) (50.4) (138.6) (86.7) (471.4)
---------- -------- --------- ------- ---------
Gross profit 155.6 76.9 115.2 92.4 440.1
Distribution expenses (38.7) (33.1) (39.3) (29.1) (140.2)
---------- -------- --------- ------- ---------
Segment result 116.9 43.8 75.9 63.3 299.9
Administrative expenses (272.8)
Operating profit 27.1
Finance income 0.2
Profit before tax 27.3
=========
Six months to 29 February 2016 (unaudited)
(1)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 289.5 76.8 167.9 110.4 644.6
Delivery receipts 7.2 2.7 3.2 2.8 15.9
Third party revenues 2.4 0.1 - 0.1 2.6
---------- -------- -------- -------- ---------
Total segment revenue 299.1 79.6 171.1 113.3 663.1
Cost of sales (160.4) (31.9) (91.9) (54.9) (339.1)
---------- -------- -------- -------- ---------
Gross profit 138.7 47.7 79.2 58.4 324.0
Distribution expenses (33.2) (22.7) (23.3) (18.0) (97.2)
---------- -------- -------- -------- ---------
Segment result 105.5 25.0 55.9 40.4 226.8
Administrative expenses (203.1)
Operating profit 23.7
Finance income 0.2
---------
Profit before tax continuing
operations 23.9
Loss before tax from discontinued
operations (2.7)
---------
Profit before tax 21.2
=========
(1) For the six months to 29 February 2016, numbers have been
restated to remove the results of the discontinued operation in
China
Year to 31 August 2016 (audited)
UK US EU RoW Total
GBPm GBPm GBPm GBPm GBPm
Retail sales 603.8 179.2 374.9 245.8 1,403.7
Delivery receipts 15.3 5.5 7.3 6.4 34.5
Third party revenues 6.4 0.1 0.1 0.1 6.7
Internal revenues - - - 3.0 3.0
-------- ------- -------- -------- ---------
Total segment revenue 625.5 184.8 382.3 255.3 1,447.9
Eliminations - - - (3.0) (3.0)
-------- ------- -------- -------- ---------
Total revenue 625.5 184.8 382.3 252.3 1,444.9
Cost of sales (331.0) (72.9) (202.5) (116.3) (722.7)
-------- ------- -------- -------- ---------
Gross profit 294.5 111.9 179.8 136.0 722.2
Distribution expenses (72.8) (46.8) (54.2) (42.2) (216.0)
-------- ------- -------- -------- ---------
Segment result 221.7 65.1 125.6 93.8 506.2
Administrative expenses (443.2)
Exceptional items (20.9)
---------
Operating profit from continuing
operations 42.1
Finance income 0.7
---------
Profit before tax continuing
operations 42.8
Loss before tax from discontinued
operations (10.1)
---------
Profit before tax 32.7
=========
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.
4. 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.
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(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 82,986,398 82,967,753 82,972,285
Weighted average effect of dilutive
options 418,556 15,015 224,372
---------------- ---------------- --------------
Weighted average shares in issue
for diluted earnings per share 83,404,954 82,982,768 83,196,657
================ ================ ==============
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Earnings
Earnings attributable to owners
of the parent 21.9 15.2 24.4
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
Pence Pence Pence
Earnings per share from continuing
operations
Basic earnings per share 26.4 22.8 41.8
Diluted earnings per share 26.3 22.8 41.7
Loss per share from discontinued
operations
Basic loss per share - (4.5) (12.4)
Diluted loss per share - (4.5) (12.4)
Earnings per share
Basic adjusted earnings per share 26.4 18.3 29.4
Diluted adjusted earnings per share 26.3 18.3 29.3
================= ================= ===============
5. Capital expenditure and commitments
During the period, the Group capitalised property, plant and
equipment of GBP19.0m and intangible assets of GBP46.1m. Disposals
were immaterial. At the period end capital commitments contracted,
but not provided for by the Group, amounted to GBP10.1m.
6. Reconciliation of cash and cash equivalents
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Net movement in cash and cash equivalents (19.4) 16.2 52.9
Opening cash and cash equivalents 173.3 119.2 119.2
Effect of exchange rates on cash
and cash equivalents 0.4 0.5 1.2
---------------- ---------------- -----------
Closing cash and cash equivalents 154.3 135.9 173.3
================ ================ ===========
The Group has a GBP20.0m revolving loan credit facility which
includes an ancillary GBP10.0m guaranteed overdraft facility and
which is available until October 2018, none of which has been drawn
down as at 28 February 2017.
7. Financial instruments
There are no changes to the categories of financial instruments
held by the Group.
Six months Six months Year to
to 28 February to 29 February 31 August
2017 2016 2016
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Financial assets
Loans and receivables(1) 167.0 149.0 179.0
Financial liabilities
Derivative liabilities used for
hedging at fair value (48.6) (36.9) (76.0)
Amortised cost(2) (360.8) (248.5) (364.9)
================ ================ ===========
(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 liabilities and are classified as Level 2
financial instruments under IFRS 13, "Fair Value Measurement." They
have been fair valued at 28 February 2017 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 28 February 2017 and a net unrealised gain of
GBP27.4m (H1 2016: loss of GBP43.2m) was recognised in equity. All
derivative financial liabilities at 28 February 2017 mature within
two years based on the related contractual arrangements.
8. 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 28 February 2017.
9. 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. At 28 February 2017, 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 28 February 2017, the Group had contingent liabilities of
GBP6.4m (H1 2016: GBP3.8m) 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 low.
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 28 February 2017.
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 28 February 2017;
-- 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
4 April 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSFFADFWSESL
(END) Dow Jones Newswires
April 04, 2017 02:00 ET (06:00 GMT)
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