Asos set for more stellar returns

ASOS, the online fashion retailer, will again defy the high street gloom this week but investors attention will focus on the stellar returns they have made in the company.

Long term investors in Asos - billed as a "fast fashion" retailer with ranges styled on clothes worn by celebrities - have already been rewarded with stunning paper profits.

Every 100 invested in the company in 2003 when the shares were merely 4p would now be worth some 58,000, excluding dividends, as the business has continued to capitalise on being first mover in what is now a fast growing international sector. They closed on Friday at 2,339p.

Standard Life Investments (SLI) and Baillie Gifford are among the biggest institutional shareholders in the company.

SLI holds some 7.29 per cent through trusts including the UK Smaller Companies Trust managed by Harry Nimmo. The dramatic growth in Asos's share price catapulted it to the largest holding in Nimmo's fund, now representing some 5.2 per cent of its assets.

Nimmo first bought into the company early in 2006 when the share price was just 86p. "Asos was really the first successful pure-play online clothes retailer, a real game-changer, and founder Nick Robertson and his team have done fantastically well," said Nimmo who highlighted the potential of the shares in an article for The Scotsman in 2008 when the shares were trading at 327p.

On Thursday analysts expect the company to post a 41 per rise in profits, driven by strong growth in overseas sales, to 28.6 million in the year to 31 March, on sales up 52 per cent to 339.5m.

Although few can question the success of the company's business model, some analysts believe the share price - which has quadrupled since the start of last year alone - has got ahead of itself in recent months. FinnCap analyst David Stoddart said although he didn't doubt that the shares should trade at a "healthy premium" to sector rivals, that premium is still reflected in his target price of 1,225p.