ASOS posts small jump in annual profit

Online fashion retailer ASOS posted a 1% rise in pre-tax profit for the year to 31 August as revenue grew, with UK sales particularly strong.

Pre-tax profit came in at £47.5m from £46.9m, on revenue of £1.2bn, up 18% from last year. UK retail sales rose 27% to £474m, while international sales were up 11% at £646m.

New chief executive officer Nick Beighton, who was promoted from chief operating officer in September, said: “We are attracting more customers with a continued expansion of our delivery proposition and mobile offerings. Customer engagement has been exceptionally strong, with increases in average order frequency, basket size and value. We now have 9.9m active customers, up 13%.

“During the year we invested £50m in our warehouse capability and our technology, and we are investing a further £80m in the new financial year.”

The company said trading year to date has started well and it currently expects sales growth for the new financial year of around 20%, gross margin investment of up to 50 basis points and a similar EBIT margin to the financial year just ended.

It added that it remains focused on achieving its next staging post of £2.5bn sales.

Numis upgraded its rating on the stock to ‘buy’ from ‘add’, noting that the shares have fallen 24% since July.

The brokerage said pre-tax profit was a touch ahead of consensus of £47.2m and its estimate of £46.5m.

“After a tough FY14, FY15 has seen ASOS stabilise and, benefiting from pricing investments and proposition improvements, clearly regain momentum,” it said.

“Looking ahead, we remain confident in ASOS’ unique proposition and believe that this can support sustainable long term global growth.”

At 0917 BST, ASOS shares were up 3.9% at 3,024p.