Final Results

ASOS PLC 11 July 2005 FOR RELEASE 7.00 am Monday 11 July 2005 ASOS plc ' ASOS' or 'Group' ('A leading Internet based fashion retailer') RECORD RESULTS Highlights 12 months to 31st March 2005 vs. unaudited pro forma accounts for 12 months to March 2004* •Group sales +79% to £13.5m •Group profit before tax and amortisation of goodwill +77% to £1.1m •Group profit after amortisation of goodwill and before tax +240% to £0.9m •Cash at bank +105% to £2.1m •Fully diluted EPS before tax and goodwill amortisation +67% to 1.5p •ASOS.com registered users + 58% to 600,000 (as at 4th July 2005) •1st quarter sales tracking over 100% year on year •Quieter summer, warehouse move and all important Christmas period still to come •Confident of another strong year * In 2004, the Group's year end was changed resulting in a 15 month audited set of accounts ASOS plc Nick Robertson, Chief Executive Tel: 020 7240 7070 Jon Kamaluddin, Finance Director www.asos.com Beattie Financial Brian Coleman-Smith / Jo Clewlow / Nia Thomas Tel: 020 7053 6400 Seymour Pierce Mark Percy / Ewan Leggat 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 600,000 registered customers at 4 July 2005, and offers over 1800 lines across womenswear, menswear, jewellery, beauty, accessories and footwear. ASOS PLC Chief executive's statement for the YEAR ended 31 MARCH 2005 Summary We continue to make significant strides in establishing ASOS as the UK's premier online fashion retailer. The strategy of broadening the product offer has paid off. We currently sell around 1800 lines, up from 500 a year ago and we add 100 to 150 new lines per week. We are consistently the second most visited online fashion store in the UK behind Next (source: Hitwise). In March 2005, ASOS.com attracted over one million unique visitors for the first time. There remains considerable opportunity for ASOS in the UK and we are on track to deliver another strong year of growth. Highlights 12 months to 31st March 2005 vs. unaudited pro forma accounts for 12 months to March 2004* •Group sales +79% to £13.5m •Group profit before tax and amortisation of goodwill +77% to £1.1m •Group profit after amortisation of goodwill and before tax +240% to £0.9m •Cash at bank +105% to £2.1m •Fully diluted EPS before tax and goodwill amortisation +67% to 1.5p •ASOS.com registered users + 58% to 600,000 (as at 4th July 2005) •1st quarter sales tracking over 100% year on year •Quieter summer, warehouse move and all important Christmas period still to come •Confident of another strong year * In 2004, the Group's year end was changed resulting in a 15 month audited set of accounts New department performances Through the course of the year we extended the product offer to include four new departments namely; footwear, jewellery, beauty and accessories. I am pleased to report that all new departments made a valuable contribution to the business. The latest figures for June show womenswear continuing to dominate with 60% of sales and the remaining 40% split as follows: female footwear 12%, female accessories 6%, jewellery 5%, beauty products 3% and menswear held ground at 14%. Stock levels We ended the year with £1.6m of stock compared to £0.5m at the same stage last year. We peaked at £1.9m in the run up to Christmas. Since the 31st March 2005, we have reduced this to approximately £1.1m equating to 4.4 weeks of forward cover. At these levels, the space issues we experienced at Christmas have not been repeated. Gross margin The effect of the warehouse space issue over Christmas, and the subsequent higher than budgeted discounting of winter stock, was a 1.5% drop in gross margin for ASOS.com for the year to 45.9% from 47.4%. We have since recovered this loss and expect to achieve a gross margin for the current financial year of at least 48%. Returns The average returns rate for the business is 20%. The rate is slightly higher for womenswear but lower for menswear, beauty and jewellery. We anticipate a similar level of returns for the year to March 2006. Basket value and average units per basket Both indices improved over the course of the year. On average, our customers placed 2.4 items into their basket, up from 1.7 the previous year. They are now spending on average, £45 (£37 ex VAT) per basket, up from £38 (£32 ex VAT). Approximately 4-5% of customers who visit ASOS make a purchase. Marketing Since Christmas we have invested considerable time updating both the web site and all visual communication associated with ASOS. The results have been very positive. The single biggest sales generator is our e-mail which we now send to 500,000 female customers twice a week and 100,000 male customers once a week. This is effectively 'free' marketing and its success has enabled us to reduce our investment in more traditional forms of paid-for marketing such as magazines. In addition, we completely overhauled our online affiliate programme in May 2005, reducing the cookie period (the time between a referred customer visiting ASOS and ASOS paying a commission on a sale) to 7 days from 60 days and fixing the majority of commissions at 10%. We also terminated all affiliate partners who were deemed to be misrepresenting ASOS or ASOS products. 3rd Party Revenues As the popularity of ASOS grows and traffic levels to the site increase, we are able to generate additional revenue for banner advertising and database sales. In the year to March 2005 we generated £229,000 this way. We expect this to rise to approximately £300,000 for the year to March 2006. International International sales equated to 6.7% of our online sales, up from 6.4% from the pervious period. No attempt was made to increase our International business over the year as management focused its energies on growing UK market share and sales. An opportunity still exists for ASOS products to be represented on Amazon .com, subject to some minor technical work and a decision will be made shortly as to whether or not we take up the opportunity this year. Logistics The move to our new 70,000 square feet logistics centre is on track for the last week in July / first week in August 2005. Consolidating our logistics under one roof will enable us to operate with far greater degrees of efficiency. IT Behind the scenes, we have been upgrading our back office system to accommodate the increased site traffic and order volumes. The online market In stark contrast to the high street, online retail sales continue to race ahead. The latest figures from the IMRG Index reported a 35.6% year on year increase for May 2005, equating to £1.5billion spent online during the month. The contributory factors appear to be the rapid take-up of broadband and generally better online shopping services and delivery solutions, inspiring greater confidence in online shopping. Our customers are putting more items in their baskets and spending more per order. There is also no shortage of new customers experiencing ASOS for the first time. Entertainment Marketing UK Ltd (EM) I am pleased to report that sales in our marketing subsidiary turned the corner. In the 12 months to 31 March 2005, we achieved sales of £744,232 compared to sales of £657,281 for the 15 months to 31 March 2004. We remain committed to developing the business and will continue to expand its range of services and resource accordingly. Our people On behalf of the board I would like to thank all our team for their commitment and dedication over the year. I would like to offer a special thank you to our colleagues in Amersham who, under very testing circumstances, have kept the orders going out the door and our customers happy. I am pleased to report that Greg Conway, the former UK Managing Director of Textured Jersey Limited, has today been appointed as an Executive Director with specific responsibility for the supply chain. Nicky Wilkins has today stepped down from the Board. Nicky has agreed to stay with us for the next six months, which will see us through the Christmas period and ensure a smooth handover. I would like to thank her for her contribution to the continuing success of ASOS. Current trading & prospects We have had a good start to the new financial year and sales are currently tracking at over 100% year on year. With the traditionally quieter Summer period nearly on us, and the all important Christmas trading period yet to come, this sales comparison should not necessarily be taken as an indication of the outcome for the full year. Overall, I believe the prospects for the Group are good and I am confident that 2005/6 will be another strong year. Nick Robertson Chief Executive 11th July 2005 FINANCE DIRECTOR'S REVIEW for the YEAR ended 31 MARCH 2005 Results As noted in the Chief Executive's statement, the Group has had another strong year and turnover rose to £13.518m. Of this, £12.773m is attributable to ASOS .com Limited and £0.744m to Entertainment Marketing (UK) Limited. The resulting profit before tax and amortisation of goodwill for the Group was £1.107m, which gave a fully diluted earnings per share of 1.5p. Following a review of procedures at the end of 2002, the Board decided to change its accounting period to 31 March. This gave rise to a 15 month audited set of accounts for the comparative period 1 January 2003 to 31 March 2004. In order to make a meaningful comparison a summary of the audited results for the year to 31 March 2005 is shown below, against the unaudited proforma results for the 12 months to 31 March 2004. Audited Unaudited Year on Year uplift 12 months Proforma 31 March 12 months 2005 31 March 2004 Group Sales £13.518m £7.541m 79% ASOS Sales £12.773m £7.004m 82% Group Profit before tax £1.107m £0.625m 77% (exc Goodwill Amortisation) Group Profit before tax £0.878m £0.258m 240% Fully diluted EPS 1.5p 0.9p 67% (before tax and Goodwill Amortisation) Dividends Inspite of two years of profitable trading the parent company still has retained losses and as such a dividend cannot be paid for the year to 31 March 2005. The Board will actively consider future dividend payments. Taxation Deferred tax assets of £0.270m (2004: £0.270m) have been recognised as the directors believe this amount is likely to be recovered in the foreseeable future. This asset arises from the availability of trading losses. This asset will be recovered when sufficient trading profits have been generated to utilise the trading losses. The Group has tax losses of £2.750m (2004: £1.944m) which are available for offset against future taxable profits. Cashflow and Balance Sheet The Group was strongly cash generative for the 12 month period generating a £1.163m net cash inflow from operating activities (15 month period to 31 March 2004: cash inflow £1.084m). Capital expenditure for the period was £0.299m (2004: £0.121m). This was predominantly invested in computer hardware to support the continued growth in traffic to the website, the development of new software for use in-house and in preparations for ASOS.com's warehouse move. During the period share options under the Group's EMI Approved Share Option scheme were exercised raising £0.152m. As a result of a total cash inflow of £1.055m for the period, the Group had a cash balance of £2.060m as at 31 March 2005 (2004: £1.004m). Surplus funds have been placed on time deposit with a AAA rated bank in accordance with the Group's low risk investment policy. Interest receivable during the year amounted to £38,799. The Group continues to be cash generative in the current financial year and we are confident that we will continue to generate cash from operating activities. Net current assets increased to £2.036m at the year end (31 March 2004: £0.988m). Jon Kamaluddin Finance Director 11th July 2005 ASOS PLC Consolidated Profit And Loss Account for the YEAR ended 31 MARCH 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ TURNOVER 13,517,676 7,540,618 8,956,332 Cost of sales (6,927,613) (3,710,709) (4,444,760) --------- --------- --------- GROSS PROFIT 6,590,063 3,829,909 4,511,572 Admin expenses (5,522,150) (3,207,863) (3,967,031) Amortisation of goodwill (228,334) (228,334) (285,418) --------- --------- --------- OPERATING PROFIT 839,579 393,712 259,123 Interest receivable/payable 38,653 3,126 (918) --------- --------- --------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 878,232 396,838 258,205 Tax on profit on ordinary activities - 270,000 270,000 PROFIT FOR THE FINANCIAL --------- --------- --------- PERIOD 878,232 666,838 528,205 --------- --------- --------- EARNINGS PER SHARE Basic 1.3p 1.0p 0.8p Fully Diluted 1.2p 1.0p 0.8p 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 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ FIXED ASSETS Intangible assets 1,248,482 1,476,816 1,476,816 Tangible assets 327,315 116,182 116,182 --------- --------- --------- 1,575,797 1,592,998 1,592,998 --------- --------- --------- CURRENT ASSETS Stocks 1,587,308 521,680 521,680 Debtors 1,216,615 780,263 780,263 Cash at bank and in hand 2,059,581 1,004,118 1,004,118 --------- --------- --------- 4,863,504 2,306,061 2,306,061 CREDITORS: amounts falling due within one year (2,827,586) (1,317,883) (1,317,883) --------- --------- --------- NET CURRENT ASSETS 2,035,918 988,178 988,178 --------- --------- --------- TOTAL ASSETS LESS --------- --------- --------- CURRENT LIABILITIES 3,611,715 2,581,176 2,581,176 --------- --------- --------- CAPITAL AND RESERVES Called up share capital 2,511,026 2,379,292 2,379,292 Share premium account 2,995,931 2,975,358 2,975,358 Profit and loss account (1,895,242) (2,773,474) (2,773,474) SHAREHOLDERS' FUNDS --------- --------- --------- (ALL EQUITY) 3,611,715 2,581,176 2,581,176 --------- --------- --------- ASos PLC Consolidated Cash Flow Statement for the YEAR ended 31 MARCH 2005 Year ended Proforma 15 Months ended Unaudited 12 Month period ended 31 March 2005 31 March 2004 31 March 2004 £ £ £ Net cash inflow from operating activities 1,163,364 822,310 1,083,877 Returns on investments and servicing of finance Interest received 38,799 3,126 205 Interest paid (146) - (1,123) --------- --------- --------- Net cash inflow/(outflow) from returns on investments and servicing of finance 38,653 3,126 (918) Capital expenditure Payments to acquire tangible fixed assets (298,861) (61,300) (120,501) --------- --------- --------- NET CASH INFLOW BEFORE FINANCING 903,156 764,136 962,458 Financing Net inflow from issue of ordinary shares 152,307 215,582 215,582 Repayment of short term loan - (1,000) (1,000) --------- --------- --------- Net cash inflow from financing 152,307 214,582 214,582 --------- --------- --------- INCREASE IN CASH 1,055,463 978,718 1,177,040 --------- --------- --------- NOTES TO THE CASH FLOW STATEMENT Reconciliation of operating profit to net cash inflow from operating activities Year Proforma 15 Months ended Unaudited 12 Month period ended ended 31 March 31 March 2004 31 March 2004 2005 £ £ £ Operating profit 839,579 393,712 259,123 Amortisation charge 228,334 228,334 285,418 Depreciation charge 87,729 57,666 74,895 (Increase)/dec rease in stock (1,065,628) 90,405 100,534 (Increase)/dec rease in debtors (436,353) (173,974) 202,792 Increase in creditors 1,509,703 226,167 161,115 ------------ --------- ---------- 1,163,364 822,310 1,083,877 ------------ --------- ---------- EARNINGS PER SHARE The calculations of earnings per share are based on the following: Year 15 months Ended ended 31 March 31 March 2005 2004 Profit attributable to shareholders 1,384,065 528,205 Weighted Average number of shares: For basic earnings per share 69,917,012 64,861,996 For diluted earnings per share 73,907,179 66,196,066 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 2005 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

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