Asos puts warnings behind it posting small rise in full-year profit
By WGSN Insider

Last year, profits were hit by a fire at its main distribution warehouse in Barnsley, investment in infrastructure and setting up its Chinese operations. WGSN Global News Editor Nigel Taylor reports

Oct 21, 2015
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Online retailer Asos seems to have moved on from a series of profit warnings last year, reporting a small rise in full-year profit.

Pre-tax profit increased by 1% over the year ended August 31 to reach £47.5m over the year ended August 31.

Last year, profits were hit by a fire at its main distribution warehouse in Barnsley, investment in infrastructure and setting up its Chinese operations, combined with adverse currency movements.

Revenue grew by 18% to reach £1.15bn from £975.5 m last year.

Founder Nick Robertson stepped down as chief executive last month, handing over the reins to chief operating officer Nick Beighton.

Beighton said the results show “encouraging progress” and profits are on track with plans.

He added: “We are attracting more customers with a continued expansion of our delivery proposition and mobile offerings. Customer engagement has been exceptionally strong, with increases in average order frequency, basket size and value.”

Over the year, the retailer invested £50m in its warehouse capability and technology, and plans to invest a further £80m this year.

Asos also revealed plans to roll out the loyalty scheme it has been trialling over the next six months, initially to UK customers. The Asos Rewards loyalty scheme will not just reward sales, but customers’ total engagement with the brand. This will include interaction on social media, such as when a customer posts a photograph of themselves on Instagram in an Asos outfit with the “As seen on me” hashtag.

The retailer is positive about its prospects for the year ahead, with preparations for peak season “at an advanced stage”. Beighton anticipates approximately 20% sales growth for the coming year, and a similar EBIT margin to this year. “We remain focused on achieving our next staging post of £2.5bn sales,” he said.

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