Web fashion firm Asos in top shape as half-year profits leap

Online fashion firm Asos remains on track to achieve its sales and margin guidance for the full year after cheering a double-digit hike in half-year profits.

Picture: Fashion GPS
Picture: Fashion GPS

The group, which was established in 2000 and has become one of Britain’s biggest ecommerce success stories, said it had made a “good start” to its financial year after a bumper festive season helped drive pre-tax profits up 18 per cent to £21.2 million.

Results for the six months to 29 February also revealed that retail sales rose 24 per cent on a constant currency basis to £648.6m, as the firm grew its active customer base 17 per cent to 10.9 million. UK sales lifted 25 per cent, while international takings were up by 24 per cent.

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Chief executive Nick Beighton, who took over last year from founder Nick Robertson, said: “I’m pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year.”

But the results showed that the group counted the cost of its failed Chinese venture, with interim losses of £2.7m, following a shortfall of £3.1m a year earlier.

Asos, which stands for As Seen On Screen, said it was pulling the plug on its Chinese arm last week, with the group to trade via Asos.com rather than a local website.

The firm will continue to push its other overseas operations, with international sales now accounting for more than half of group turnover.

Steve Clayton, head of equity research at Hargreaves Lansdown, said: “Asos may be drawing the curtain across its loss-making Chinese operations, but its performance in key markets more than makes up for that disappointment.”

Claire Huff at RBC Capital Markets said the firm had reported a pre-tax profit figure about 5 per cent ahead of her forecast.

She noted: “Overall this is a solid H1 for Asos, particularly when compared with Next’s recent online growth and outlook comments. We think Asos should be well placed to benefit from… the structural growth in the global online apparel market.”