Business
Business

Asos shares soar 18% despite fall in profits

A model walks on an in-house catwalk at the ASOS headquarters in London Image copyright Reuters

Annual profits at Asos have fallen by 14% after the online retailer was hit by the strength of sterling and a major warehouse fire.

Pre-tax profits fell to £46.9m in the year to 31 August despite Asos increasing sales by 27% to £955.3m.

However, overseas sales have slowed due to the strong pound forcing Asos into a series of promotions.

But Asos shares rose 18% as investors bet that a difficult year that included three profit warnings was over.

Investment plans

Market Data - BBC News

Market Data

Share Prices

Markets

UK markets
UK markets % change Value
Change
-0.40%
7611.64
-30.81
-0.32%
20509.76
-65.35
Europe markets
Europe markets % change Value
Change
+0.05%
561.48
+0.29
-0.16%
5403.41
-8.91
0.00%
12358.87
+0.13
-0.01%
3409.44
-0.24
-0.25%
9507.00
-23.40
US markets
US markets % change Value
Change
+0.51%
25315.82
+128.12
+0.60%
7866.66
+46.95
+0.67%
2840.71
+18.78
Asia markets
Asia markets % change Value
Change
+0.55%
37852.00
+207.10
-0.66%
27752.93
-183.64
+2.28%
22356.08
+498.65
As of 18:27 14 Aug 2018

Currencies

GBP
% change One £ buys
Change
GBP against Euro
+0.24%
€1.1213
+0.0030
GBP against Yen
+0.17%
¥141.5150
+0.2400
GBP against USD
-0.40%
$1.2716
-0.0050
USD
% change One $ buys
Change
USD against Euro
+0.56%
€0.8814
+0.0050
USD against GBP
+0.31%
£0.7861
+0.0020
USD against Yen
+0.47%
¥111.2450
+0.5250
Euro
% change One € buys
Change
Euro against GBP
-0.25%
£0.8918
-0.0020
Euro against Yen
-0.08%
¥126.1950
-0.1000
Euro against USD
-0.62%
$1.1339
-0.0070
Yen
% change One ¥ buys
Change
Yen against Euro
+0.08%
€0.0080
0.0000
Yen against GBP
-0.17%
£0.0070
0.0000
Yen against USD
-0.47%
$0.0090
0.0000
As of 18:24 14 Aug 2018

Commodities

Oil
Commodity % change dollars per barrel
Change
Brent Crude Oil Futures
+0.01%
72.62
+0.01
WTI Crude Oil Futures
0.00%
67.20
0.00
Gold
Commodity % change dollars per ounce
Change
Gold (Forex Index am fix)
0.00%
1204.40
0.00
Gold (Forex Index pm fix)
-1.16%
1200.35
-14.05
Natural Gas
Commodity % change dollars per million BTU
Change
Natural Gas (Henry Hub Futures)
+0.99%
2.96
+0.03
As of 18:24 14 Aug 2018

Chief executive Nick Robertson said in a statement: "Despite all that happened this year, we still delivered 27% growth in sales, with the UK a standout performance at 35% growth.

"We are in a period of major investment that comes at a short term cost, but the medium-term benefits will be significant.

"Asos has always been about the longer journey to a very big prize: to be the world's leading fashion destination for 20-somethings, and we are firmly focused on our next staging post of £2.5bn sales."

Also on Tuesday, the firm announced that it had promoted chief financial officer Nick Beighton to the chief operating officer role.

In June, Asos briefly suspended trading after a fire at its main warehouse in Barnsley. The company has also been investing heavily in China.

Confidence 'mixed'

Investors greeted the annual results by pushing Asos shares up sharply. "Management has now bought itself some time to tackle the issues," said analysts at N+1 Singer in a note.

But Anusha Couttigane, consultant at retail analysts Conlumino, said that challenges remain.

"Nick Robertson is keen to point out the long term ambitions of the retailer. Yet the way things stand, it is clear that some investors are growing impatient.

"With Asos' share value halving over the course of the year, it is evident that confidence in the retailer's ability to generate a fast turnaround is mixed," she said.

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