Shares up as pre-tax profits fall at online retailer Asos
Asos, the UK's biggest online-only retailer, said full-year results will be in line with expectations even after first-half profit fell 10pc, hurt by a new pricing policy and investments to speed up shipping.
Pre-tax profit decreased to £18m (€24.7m) in the six months through February, the London-based company said in a statement yesterday.
The retail gross margin narrowed by 270 basis points to 46.8pc.
"With our continued investment in our international price competitiveness gaining traction, momentum in the business is building," chief executive Nick Robertson said in the statement.
"This gives us confidence in the outlook for the second half and that full year profit and margin will be in line with expectations."
The company, which sells Converse sneakers and Cheap Monday jeans to twenty-somethings, is to introduce pricing for individual markets to better adjust to currency swings.
The retailer has also recovered after a fire in June at its Barnsley distribution centre, which is the size of six football pitches, hurt business.
The stock rose 7.4pc in early trading trading in London. Shares gained 13pc on March 12 after the retailer said total retail sales rose 14pc in the first half , with UK sales up 27pc and international sales gaining 5pc. Profit was helped by an insurance payment of £6.3m.
Distribution costs rose 8pc to £78.7m as orders rose 14pc in the period. The retailer has said sales of £2.5bn is its "next staging post".