Asos delivers growth despite high investment costs
The group posted a 28% rise in annual pre-tax profits to £102 million.
Online fashion retailer Asos reported another year of double-digit sales and profit growth despite ongoing investment in increasing its capacity.
Group revenues climbed 26% to £2.42 billion in the year to the end of August.
Retail sales were up 26% to £2.36 billion, supported by growth of more than 20% in both the UK and international markets.
This marked the group’s third consecutive year of sales growth in excess of 20%.
Meanwhile pre-tax profits were broadly in line with market expectations, coming in 28% higher than last year at £102 million.
Analysts had expected just over £100 million.
This was despite heavy transition costs incurred as the business upgraded its warehouses to cope with demand, as well as a £2.7 million impairment charge on the closure of its A-List loyalty scheme.
In April, Asos shares dropped after it outlined plans to spend between £230 million and £250 million investing in the business’s infrastructure.
This was higher than a previous estimate of up to £220 million.
The company reiterated its plans on Wednesday, saying the investments in warehousing and technology would facilitate further growth.
Chief executive Nick Beighton said: “Our guidance remains unchanged both for the current year and the medium term, despite our record levels of investment.
“Asos is moving fast and is as differentiated as ever.
“The potential for our business is huge and we remain focused on building Asos into the world’s number one destination for fashion loving 20-somethings”.
Ed Monk, associate director at Fidelity Personal Investing’s share dealing service, said Asos was still a cut above its competitors.
“Asos is expanding internationally, growing its market share in overseas territories and should maintain an advantage in its online proposition against rivals that will have to invest heavily to catch up,” he said.