Asos is back in fashion despite profits slump
Online shopping giant Asos was back in fashion with investors, even after releasing half-year results which showed profits sliding by 87pc.
After a profit shock in December and a tricky trading period in the six months to February, in which chief executive nick Beighton conceded there were ‘a number of things we can do better’, the firm has come out fighting.
Asos refused to cut full-year forecasts, saying it had identified areas where it could improve and was ‘taking action’. investors were convinced, as shares jumped by 7.8pc, or 247p, to 3397p.
Part of the problem for millennial-favourite Asos has been its major investment in new technology and infrastructure, which has caused significant disruption and costs as it moves systems.
But in a sign that the business may have taken its eye off the ball, Beighton added: ‘We should have stocked more animal print skirts.’ Such items proved hugely popular with customers over the period, and Asos admitted it had not ordered large enough quantities of the most in-demand products. Heavy discounting also weighed on its performance.
Though profits fell from £39.9m to just £4m, group sales were up by 14pc to £1.3bn. But in an effort to prove to investors that his business’s growth story wasn’t over yet, Beighton said: ‘Asos is capable of a lot more.’ elsewhere in the fashion world,
Ted Baker was trying to move past the hugging scandal involving boss Ray Kelvin as it announced a Chinese joint venture. it will partner with Shanghai longshang to create a new company, which will manage Ted Baker’s presence in the region and aim to drive its expansion. Shares rose 1.2pc, or 18p, to 1488p.
The FTSE 100 ended the day almost flat, down 0.05pc, or 3.66 points, at 7421.91. Reckitt Benckiser was one of the biggest drags, falling 6.5pc, or 416p, to 5992p as it tried to distance itself from troubled drugs company indivior.
Tesco stood out among the bluechips, climbing 3.6pc or 8.4p, to 242.3p as it revealed a surge in profits. And Pagegroup boosted the FTSe 250 into the black, as the recruiter brushed away worries that Brexit might be dampening the jobs market.
Profits over the first quarter of 2019 climbed in all four of its key regions – the UK, Asia Pacific, the Americas and europe, Middle east and Africa. Shares rallied 5.4pc, or 26.8p, to 520p.
After the start of 2019 heralded the quietest quarter for stock market listings in eight years, a slightly busier second quarter continued with the float of Network International. The Dubai-based payments group hit the stock market with its shares priced at 435p, but by the end of the day they had soared 20pc to 522p, giving the company a value of around £2.4bn.
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