Asos profit held back by hefty investment

PROFITS have stalled at Asos, the online fashion star, as it ploughs cash into its overseas business and technology.

Shares in Asos lost ground yesterday
Shares in Asos lost ground yesterday

Shares lost ground yesterday as the group cautioned that significant investment would prevent earnings from growing in the current financial year. It follows a profit alert in June and a serious fire at its main warehouse in Barnsley which forced it to suspend orders.

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Prior to the latest update, analysts were forecasting a consensus pre-tax profit for the 2013-14 year of £45 million, down from £54.7m in 2012-13.

Freddie George, a retail analyst at Cantor Fitzgerald, retained his forecast for profits of £46m in the year to August but reduced his target for the year to August 2015 from £55m to £48m.

Nick Robertson, chief executive of Asos, which stocks some 90,000 branded and own-brand products aimed at 20-something customers, said: “We remain focused on the long-term opportunity for Asos, with £2.5 billion of sales as our next staging post.”