Online retail giant Asos' (ASC.L) profit for the six months to 28 February surged 253% and it had an “exceptional first-half performance” as more and more consumers shopped online due to lockdown restrictions.
Shares were up roughly 1.8% on Thursday morning.
Its profit was £106.4m ($146.5m), up from £30.1m a year earlier, while total sales grew 25% and its active customer base increased to 24.9 million, up 1.5 million over six months.
Group revenue and retail sales were both roughly £2bn, and both were up 24% year-on-year.
Nick Beighton, CEO, said “these record results, which include robust growth in sales, customer numbers and profitability, demonstrate the significant progress we have made against all of our strategic priorities and the strength of our execution capability.
“There aren’t too many businesses that can say the pandemic triggered record profits. Asos is among that elite list, of course, because it’s a digital-only player," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
However, she said: "It's not necessarily smooth sailing from here – a pandemic boon is good, but that doesn’t mean it’s good enough. The tailwind provided by COVID is expected to unwind as the hospitality and tourism sectors reopen, and ASOS’ customers have more to do with their time than adding yet another loungewear set to their online baskets."
She said it is crucial to see how many of the new customers that joined during the last year plan to stick around.
Meanwhile, earlier this year Asos had sealed the deal to buy Arcadia brands Topshop Topman, Miss Selfridge and sportswear brand HIIT for a total £330m. It acquired the brands, intellectual property and inventory, but not the high street foot print.
“The swift integration of the Topshop brands and the impressive early customer engagement is also especially pleasing,” said Beighton.
One-off acquisition and integration costs from the deal are expected to be around £10m.
The company said its net cash position was £92m, “reflecting robust underlying cash generation, £266m investment in Topshop brands and the anticipated working capital unwind, following COVID-19 delays to peak stock build.”
Asos said it has continued with its platform expansion through the period, adding 120 new brands and 18,300 new Click and Collect locations, which now stand at 166,000 locations globally.
Going forward, it said it wants to "retain caution on near term consumer outlook driven by uncertain 20-something economic prospects, timing of global restrictions lifting and possible further COVID-19 peaks."
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Its expectations for the upcoming full financial year "has increased in line with first half performance" and it expects the second half of the year "to be cash generative driven by underlying performance, continued capex discipline and supported by our normal working capital cycle."
Back in February, Asos launched a multi-million-pound campaign targeted at Topshop and Topman customers, letting them know that they can shop their brands on Asos, following their acquisition.
The social-led campaign ran across YouTube, TikTok, Snapchat, Facebook and Instagram for two weeks and was targeted at driving awareness among customers in the UK, US and Germany.
Online shopping has been a bright spot for retail. It remained strong with a 73.2% rise in January, accounting for 54.9% of all retail spend in the month, even as consumer spending declined 16.3%.
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