Asos half year profits blow
With its sales up by 14 per cent for the six months to 28th February, reaching £1.31 billion, most would turn have good reason to celebrate, however pre-tax profits fell dramatically by 87 per cent.
"Asos is capable of a lot more, said chief executive Nick Beighton. "We have identified a number of things we could do better and are taking action accordingly. We are confident of an improved performance in the second half and are not changing our guidance for the year."
The business attributed much of the blame to what it called temporary transaction costs linked with its US expansion together with heavy discounting and challenging trading conditions in the run up to Christmas. Yet overall sales had increased by 12 per cent at constant currency to £1.3 billion. UK sales had risen by 16 per cent with active customer growth 13 per cent up year-on-year. Weaker German and French markets had, though, impacted EU sales growth.
"We are nearing the end of a major capex programme. Whilst this has inevitably involved significant disruption and transition costs, the global capability it now provides us gives us increased confidence in our ability to to continue to capture market share whilst restoring profitability and accelerating free cash flow generation," added Beighton.