AIM stars Boohoo and Asos lead fashion pack
London’s junior market has its critics but it has managed to incubate some quite hefty tech firms.
They might not be on the scale of silicon Valley, where ridehailing services Uber and Lyft are the latest to roll off the production line. However, AIM does have a couple of notable ‘beacon companies’ in online fashion retailers Boohoo and Asos.
Asos – founded by nick Robertson, Andrew Regan and Quentin Griffiths in 2000 and listed on the alternative market in 2001 – has, for a long time, been described as AIM’s big daddy.
But Boohoo now appears to be vying for the crown with a quite stonking run that would have turned a £1,000 investment five years ago into £10,500.
Yesterday the shares closed up 2.5pc, or 6.1p, at 245.7p, though City broker numis reckons the stock is worth 290p.
If Boohoo hits numis’s target it would be worth £3.4bn – putting it neck and neck in the valuation stakes with Asos, off 1pc, or 42p, at 4002p. According to analysts, Boohoo is less a single brand these days and more an online platform for smaller labels, key among them Pretty Little Thing and nasty Gal. The latter it bought for a bargain £15m two years ago.
‘Boohoo remains one of our top picks in the sector,’ said Andrew Bowler of numis, reiterating his ‘buy’ guidance.
Moving up to the top flight for shares, the FTSE 100 endured a lacklustre day, trading sideways to finish slightly up 0.2pc, or 12.47 points, at 7440.66.
Traders appeared to be keeping their powder dry ahead of the Us Federal Reserve’s monthly review of interest rates tomorrow and the flurry of UK banks and retailers reporting later in the week.
Crude oil prices retreated a little from their highs of last week, providing some respite for travel stocks.
Tui Group , which also runs a holiday airline fleet, was up 2.6pc, or 22.4p, at 866.6p, while EasyJet followed in its slipstream, rising 1pc, or 12p, to 1166p.
British Airways- owner IAG advanced 2pc, or 10.6p, to 546p after receiving an additional boost from the London arm of swiss bank UBs, which moved to ‘buy’ on the stock. The 12-month price target remains 705p after a fall from a high of around 667p in February.
‘We think share price pressure is now overdone,’ said analyst Jarrod Castle. He reckons IAG is trading close to the bottom, with the prospect for precipitous falls limited.
Investors decided to shop elsewhere when it came to online grocer Ocado, which saw its shares sink 0.6pc, or 8.5p, to 1389.5p after confirming that the fire that had torched its robot-run warehouse in Andover in February had been caused by a faulty battery.
Meanwhile, FTsE 250 home repairs group Homeserve got a shock after HsBC downgraded the stock to ‘reduce’ on valuation grounds, with the shares sliding 3.2pc, or 36p, to 1095p in response.
There was some good news for the UK’s largest pharma company,
Astrazeneca, whose shares rose 0.8pc, or 45p, to 5840p after its Lynparza drug was recommended for approval in the European Union to help treat advanced ovarian cancer.
Consumer goods group Unilever also ticked up 0.5pc, or 23p, to 4610p after it unveiled a £142m share buyback.
shares in Mexico-focused junior miner Alien Metals were out of this world, rocketing 144.1pc, or 0.24p, to 0.41p after discovering metal mineralisation at its donovan 2 project.