Final Results

ASOS PLC 04 July 2006 FOR RELEASE 7.00 am Tuesday 4 July 2006 ASOS plc 'ASOS' or 'Group' ('A leading Internet based fashion retailer') RECORD RESULTS RESULTS •Group sales +39% to £18.80m •Group profit before tax and amortisation of goodwill + 49% to £1.65m •Group profit before tax + 61% to £1.42m •Remaining insurance proceeds of £0.60m expected in the six months to 30 September 2006 •Cash at bank +82% to £3.74m •Fully diluted EPS before tax and goodwill amortisation +47% to 2.2p •ASOS.com registered users +60% to 960,000 (as at 2 July 2006) •Sales for the 13 weeks to 2 July 2006 are 65% ahead of last year HIGHLIGHTS •Continued strong growth •Investment in the future - people, systems and logistics •Resilience of business - recovery from Buncefield •Confident of another strong year ASOS plc Nick Robertson, Chief Executive Tel: 020 7240 7070 Jon Kamaluddin, Finance Director Tel: 020 7240 7070 www.asos.com Cubitt Consulting Brian Coleman-Smith / Nia Thomas Tel: 020 7367 5100 Seymour Pierce Mark Percy / Nicola Marrin Tel: 020 7107 8000 ASOS plc is an Internet Retail and Marketing Services Group, established in June 2000 and admitted to AIM in October 2001. Its principal business is ASOS.com, a leading online fashion and beauty retailer. Aimed primarily at an Internet savvy 18-34 year old, ASOS has over 960,000 registered customers at 2 July 2006, and offers over 4,000 lines across womenswear, menswear, jewellery, beauty, accessories and footwear. CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2006 SUMMARY The Group reports a 39% increase in sales to £18.80m for the year to March 2006 and a 49% increase in profit before tax and amortisation of goodwill to £1.65m. At the year end there was £3.74m in cash at bank, up from £2.06m the previous year to March 2005. A strong performance considering our only warehouse was damaged by the Buncefield Fuel Depot explosion on 11 December 2005. As a result, the website was closed for transactions for five and a half weeks and 19,000 undeliverable orders were refunded. Trading in the fourth quarter was disrupted as we re-established the stock position to the correct mix and level. Had we not been affected by Buncefield, we believe Group sales would have been in the region of £25m, delivering a profit before tax of approximately £2.20m. Due to phasing of the insurance proceeds, we are expecting to receive an additional £0.60m due during the 6 months to 30 September 2006. The business has now fully recovered. On behalf of the board, I would like to pass on our sincere thanks to our colleagues whose spirit and determination got us back on our feet so quickly. I would also like to extend our very best wishes to the 106 colleagues in Hemel Hempstead who are now employed by Unipart Logistics Limited. We now have 960,000 registered users (as at 2 July 2006) and are firmly positioned behind Next as the second most visited online fashion retailer in the UK. In April 2006 we welcomed Rob Bready to the board as retail director and Peter Williams as a non-executive director. The New Year has started strongly with sales for ASOS.com 65% above last year for the 13 weeks to 2 July 2006. With nine months trading and the important Christmas period still to come, this performance should not necessarily be taken as an indication of the results for the full year. The business continues to evolve and it is essential that we continue to invest in our infrastructure to support our growth forecasts. RESULTS •Group sales +39% to £18.80m •Group profit before tax and amortisation of goodwill + 49% to £1.65m •Group profit before tax + 61% to £1.42m •Remaining insurance proceeds of £0.60m expected in the six months to 30 September 2006 •Cash at bank +82% to £3.74m •Fully diluted EPS before tax and goodwill amortization +47% to 2.2p •ASOS.com registered users +60% to 960,000 (as at 2 July 2006) •Sales for the 13 weeks to 2 July 2006 are 65% ahead of last year HIGHLIGHTS •Continued strong growth •Investment in the future - people, systems and logistics •Resilience of business - recovery from Buncefield •Confident of another strong year Lord W Alli Chairman 4 July 2006 CHIEF EXECUTIVES STATEMENT FOR THE YEAR ENDED 31 MARCH 2006 The online marketplace The growth in online shopping shows no sign of slowing. For 2006, the IMRG (Interactive Media in Retail Group) are forecasting a 36% year on year increase in online spend to £26.1 billion. The number of online shoppers is set to grow by 8% to 26 million, and they will spend an average of £1,003, up from £816 in 2005. Key to e-commerce is the number of broadband connections and this is expected to rise by 37% to 13.4 million. Customers, as they always do, are voting with their feet. Product offer The buying and merchandising team has doubled in size to support the increase in product lines from 2,000 to 4,000. Further appointments are planned to enable us to compete with the very best of the high street. In addition we will be supporting the buying team with an in-house design department over the coming months. As the profile of ASOS has risen, we have been able to attract major new brands including Diesel, Firetrap and Replay. We believe the investment in broadening our product range will support our growth ambitions for 2006/7 and beyond. The Website The website is continually evolving as the product range expands and new technologies emerge. In April 2006 we launched ASOS Catwalk - a function whereby fashion lines are presented in moving images on a catwalk as well as the traditional still images. We are currently the only fashion retailer in the UK to do this. A number of new initiatives are planned for the coming months to further enhance the shopping experience. Marketing We have over 960,000 registered users as at 2 July 2006 all of whom receive two emails a week featuring the latest products, trends and style tips. The rate at which we gather new e-mail addresses is expected to increase following a new contract, signed in April 2006, with an email acquiring company. Of all our marketing activity the email remains the single biggest generator of sales. Our investment in magazine advertising has increased which has in part been funded by our deliberate reduction in affiliate marketing activities. In our view this is necessary if we are to establish ASOS as the UK's leading online fashion business. Key Performance Indicators 05/06 04/05 ASOS.com margin (excluding Third Party Revenues) 43.8% 44.9% Returns % to sales 21.4% 20.5% Basket Value (inc VAT) £39.32 £36.56 Average units per basket 2.4 2.1 Average Selling Price per unit (inc VAT) £16.54 £17.02 % ASOS.com Sales from North America 1.6% 1.3% % ASOS.com Sales from Rest of World 7.2% 5.4% Third party revenues For the year to March 2006 we generated £0.37m (2004/5: £0.23m) in third party revenues. This is made up of banner advertising, list sales and sampling. We now have specific resource in this area and expect revenues to increase by 70% for the year to March 2007. Logistics In early 2006 we made the decision to outsource our logistics function to a third party to ensure our capabilities keep pace with the requirements of the business and to allow us to focus on our core competencies. From 1 May 2006, Unipart Logistics Limited took over the running of our distribution centre in Hemel Hempstead. Entertainment Marketing Our Marketing business fared less well during the year with sales dropping from £0.74m to £0.60m. An internal re-structure and a re-focusing of the business should result in a return to profit in the coming year. Current trading and prospects The prize for dominating online fashion in the UK is high so we must continue to invest in resource, infrastructure and marketing if we are to sustain the current growth levels and realise the full potential of ASOS. The high street is starting to invest in their online offer, so we must ensure we have better capabilities at every level to compete. Early signs are that 2006/7 should be another strong year of growth with sales for the 13 weeks to 2 July 2006 running 65% ahead of last year. Nick Robertson Chief Executive 4 July 2006 FINANCE DIRECTOR'S REVIEW FOR THE YEAR ENDED 31 MARCH 2006 Sales The breakdown of Group sales is shown below. £'000s 2006/7 2005/6 Increase % Clothing and Accessories 17,841 12,545 42% Third Party Revenues 366 229 60% Entertainment Marketing 601 744 (19%) Group Sales 18,808 13,518 39% Margin ASOS.com delivered a gross margin before third party revenues of 43.8% (2004/5: 44.9%). This was behind our expectations for the year and resulted from the increase in markdown required to clear stock left unsold after the Christmas period when the website was closed following Buncefield. We anticipate that gross margin before third party revenues will improve slightly during 2006/7. Operating costs Operating costs, including depreciation but before the one-off effects of the Buncefield Fuel Depot explosion and the costs associated with the warehouse move in August 2005, have increased in the year by £3.76m to £9.37m. The most significant rises in operating costs in 2005/6 have been in Head Office costs which have risen by £1.31m year on year to £3.17m and warehousing costs which have risen by £2.13m year on year to £3.40m. We have increased our head office team over the year from 47 to 68 people. This has grown further since the year end to 90 people. All disciplines have been strengthened and in particular we have grown our teams in Buying, Merchandising, IT and Image Management. Further rises are budgeted in 2006/07 as the full year impact of the new starters in 2005/6 flows through and as we continue to ensure that the business has the infrastructure to support its growth. The growth in staff numbers will necessitate an office move during 2006/7. We anticipate doubling our space in London during 2006/7. The impact of the above and the increase in headcount means that Head Office costs will be in the region of £5.70m in 2006/7. Our move to a new warehouse in Hemel Hempstead in August 2005 meant a significant increase in rent and other occupancy costs and the number of warehouse staff increased in the year in order to cope with the growth in volumes. Warehouse costs vary with volume and indicatively these would range from £4.60m on sales of £30m rising to £5.80m on sales of £40m in 2006/7. We anticipate that other operating costs will be in the region of £4.00m in 2006/7. Buncefield Fuel Depot Explosion The credit of £2.44m shown in the profit and loss account represents the sum of the agreed insurance proceeds received and receivable as at 31 March 2006 in respect of stock losses, increased costs of working, damage to our plant and equipment and lost gross profit, less the costs incurred as a result of the incident. We anticipate a further final amount of £0.60m to be received in 2006/ 7. Taxation The group has recognised a deferred tax asset of £0.20m (2004/5: £0.27m) as the directors believe that this amount is likely to be recovered in the foreseeable future. This asset arises from the availability of trading losses and will be recovered when sufficient trading profits have been generated to utilise the trading losses. The group has tax losses of £1.24m (2004/5: £2.75m) which are available to offset against future taxable profits. Cash and Balance Sheet The group continues to be cash generative and there was a net cash inflow over the period of £1.68m. The group has sufficient cash reserves to meet our working capital requirements and capital expenditure plans for the budgeted growth in 2006/07. We are confident that the group will continue to generate cash from operating activities. Surplus funds are on time deposit with an AAA rated bank. During the period share options under the group's EMI approved Share Option Scheme were exercised raising £16,000. Net current assets increased to £2.97m (31 March 2005: £2.04m). Capital Expenditure A total of £0.90m has been invested in the year to March 2006 of which £0.65m was spent fitting out the new warehouse in Hemel Hempstead and £0.25m was spent developing our IT systems. For 2006/7 total investment of £1.60m will be required in IT systems, warehouse fixtures and fittings and on the fit out of new London office space. Dividends The directors do not propose a dividend, however, we will continue to keep the dividend policy under review. Accounting Policies The introduction of FRS 21 has required a prior year adjustment relating to an intercompany dividend from ASOS.com Ltd to ASOS plc. The effect of this on the preceding period (2004/5) has been to increase retained earnings by £300,000 in ASOS.com Ltd and decrease the retained earnings in the company accounts of ASOS plc by the same amount. Implementation of International Accounting Standards is mandatory for AIM listed companies for results reported for years commencing on or after 1 January 2007. We will consider whether early adoption is appropriate once the full implications of introduction have been assessed. Jon Kamaluddin Finance Director 4 July 2006 ASOS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2006 Year ended Year 31 March ended 2006 31 March 2005 £ £ TURNOVER 18,807,980 13,517,676 Cost of sales (10,028,398) (6,927,613) ----------- ----------- GROSS PROFIT 8,779,582 6,590,063 Admin expenses (9,634,780) (5,522,150) Amortisation of goodwill (228,334) (228,334) Exceptional Item - Business Disruption 2,439,078 - ----------- ----------- OPERATING PROFIT 1,355,546 839,579 Interest receivable/payable 61,348 38,653 ----------- ----------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,416,894 878,232 Tax on profit on ordinary activities (65,000) - ----------- ----------- PROFIT FOR THE FINANCIAL PERIOD 1,351,894 878,232 ----------- ----------- EARNINGS PER SHARE Basic 1.9p 1.3p Fully Diluted 1.8p 1.2p The profit and loss account includes all recognised gains and losses in the current and preceding year. All activities were derived from continuing operations. ASOS PLC CONSOLIDATED BALANCE SHEET AT 31 MARCH 2006 31 March 31 March 2006 2005 £ £ FIXED ASSETS Intangible assets 1,020,148 1,248,398 Tangible assets 990,426 327,315 ----------- ----------- 2,010,574 1,575,797 CURRENT ASSETS Stocks 2,563,863 1,587,308 Debtors 2,082,198 1,216,615 Cash at bank and in hand 3,743,551 2,059,581 ----------- ----------- 8,389,612 4,863,504 CREDITORS: amounts falling due within one year (5,420,109) (2,827,586) ----------- ----------- NET CURRENT ASSETS 2,969,503 2,035,918 ----------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 4,980,077 3,611,715 ----------- ----------- CAPITAL AND RESERVES Called up share capital 2,516,649 2,511,026 Share premium account 3,006,776 2,995,931 Profit and loss account (543,348) (1,895,242) ----------- ----------- SHAREHOLDERS' FUNDS (ALL EQUITY) 4,980,077 3,611,715 ----------- ----------- ASOS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2006 Year ended Year ended 31 March 31 March 2006 2005 £ £ Net cash inflow from operating activities 2,506,977 1,163,364 --------- --------- Returns on investments and servicing of finance Interest received 61,779 38,799 Interest paid (426) (146) --------- --------- Net cash inflow from returns on investments and servicing of finance 61,353 38,653 Investing activities Payments to acquire tangible fixed assets (904,468) (298,861) Proceeds from disposal of tangible fixed assets 3,640 - --------- --------- (900,828) (298,861) NET CASH INFLOW BEFORE FINANCING 1,667,502 903,156 Financing Net inflow from issue of ordinary shares 16,468 152,307 Net cash inflow from financing 16,468 152,307 INCREASE IN CASH 1,683,970 1,055,463 --------- --------- RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT/FUND Increase in cash for the period 1,683,970 1,055,463 Net funds at 1 April 2005 2,059,581 1,004,118 --------- --------- Net funds at 31 March 2006 3,743,551 2,059,581 --------- --------- NOTES TO THE CASH FLOW STATEMENT Reconciliation of operating profit to net cash inflow from operating activities Year ended Year ended 31 March 31 March 2006 2005 £ Operating profit 1,355,546 839,579 Amortisation charge 228,334 228,334 Depreciation charge 221,633 87,730 Loss on disposal of fixed assets 16,079 - Decrease/(increase) in stock (976,555) (1,065,628) Decrease/(increase) in debtors (930,583) (436,353) Increase in creditors 2,592,523 1,509,702 --------- --------- 2,506,977 1,163,364 --------- --------- EARNINGS PER SHARE The calculations of earnings per share are based on the following: Year ended 31 Year ended 31 March 2006 March 2005 Profit attributable to shareholders 1,351,894 878,148 Weighted Average number of shares For basic earnings per share 71,753,281 69,917,012 For diluted earnings per share 74,785,943 73,907,179 No shares have been issued between the year end and date of approval of these financial statements. The financial information contained in the preliminary announcement does not constitute the company's statutory financial statements. The company's auditors have issued an unqualified report on the statutory financial statements for the 12 months ended 31 March 2006 and have not made any statement under section 237 (2) or (3) of the Companies Act 1985. A copy of the company's statutory financial statements will be delivered to the Registrar of Companies shortly. This information is provided by RNS The company news service from the London Stock Exchange

Companies

ASOS (ASC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today