REG - ASOS PLC - Final Results <Origin Href="QuoteRef">ASOS.L</Origin> - Part 2
17/10/2017 07:06
- Part 2: For the preceding part double click ID:nRSQ7507Ta
(1.2) (67.5)
Total comprehensive income/(loss) for the year - - 24.4 - (66.3) (1.2) (43.1)
Net cash received on exercise of shares from EBT2 - - - 0.7 - - 0.7
Transfer of shares from EBT2 on exercise - - (0.3) 0.3 - - -
Share-based payments charge - - 5.0 - - - 5.0
Deferred tax on share options - - 0.5 - - - 0.5
Balance as at 31 August 2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4
1Retained earnings includes the share-based payments reserve
2Employee Benefit Trust and Capita Trust
Consolidated Statement of Financial PositioN
At 31 August 2017
At31 August 2017 At 31 August 2016
£m £m
Non-current assets
Goodwill 1.1 1.1
Other intangible assets 176.9 112.4
Property, plant and equipment 137.4 77.2
Derivative financial assets 1.3 -
Deferred tax asset 9.2 13.3
325.9 204.0
Current assets
Inventories 323.3 257.7
Trade and other receivables 28.6 15.0
Derivative financial assets 2.3 -
Cash and cash equivalents 160.3 173.3
514.5 446.0
Current liabilities
Trade and other payables (480.7) (370.7)
Derivative financial liabilities (57.7) (55.0)
Current tax liability (5.8) (2.9)
(544.2) (428.6)
Net current (liabilities)/assets (29.7) 17.4
Non-current liabilities
Derivative financial liabilities (9.1) (21.0)
(9.1) (21.0)
Net assets 287.1 200.4
Equity attributable to owners of the parent
Called up share capital 2.9 2.9
Share premium 6.9 6.9
Employee Benefit Trust reserve (0.6) (2.6)
Hedging reserve (47.5) (60.0)
Translation reserve (1.8) (1.5)
Retained earnings 327.2 254.7
Total equity 287.1 200.4
Consolidated Statement of Cash Flows
For the year to 31 August 2017
Year to 31 August 2017 Year to 31 August 2016
£m £m
Operating profit from continuing operations 79.6 42.1
Loss before tax from discontinued operations - (10.1)
Operating profit 79.6 32.0
Adjusted for:
Depreciation of property, plant and equipment 13.7 10.5
Amortisation of other intangible assets 28.6 21.2
Loss on disposal of non-current assets from continuing operations 0.5 0.8
Loss on disposal of non-current assets from discontinued operations - 4.3
Increase in inventories (65.6) (63.8)
(Increase)/decrease in trade and other receivables (13.6) 4.2
Increase in trade and other payables 103.3 128.7
Share based payments charge 7.6 4.5
Other non-cash items (0.6) (1.7)
Income tax paid (7.6) (10.0)
Net cash generated from operating activities 145.9 130.7
Investing activities
Payments to acquire other intangible assets (89.5) (55.7)
Payments to acquire property, plant and equipment (72.0) (23.5)
Finance income 0.5 0.8
Net cash used in investing activities (161.0) (78.4)
Financing activities
Net cash inflow relating to EBT1 1.8 0.7
Finance expense - (0.1)
Net cash generated in financing activities 1.8 0.6
Net (decrease)/increase in cash and cash equivalents (13.3) 52.9
Opening cash and cash equivalents 173.3 119.2
Effect of exchange rates on cash and cash equivalents 0.3 1.2
Closing cash and cash equivalents 160.3 173.3
1Employee Benefit Trust and Capita Trust
Notes to the financial information
For the year to 31 August 2017
1. Preparation of the consolidated financial information
a) General information
ASOS Plc ('the Company') and its subsidiaries (together, 'the Group') is a
global fashion retailer. The Group sells products across the world and has
websites targeting the UK, US, Australia, France, Germany, Spain, Italy and
Russia. The Company is a public limited company which is listed on the
Alternative Investment Market (AIM) and is incorporated and domiciled in the
UK. The address of its registered office is Greater London House, Hampstead
Road, London, NW1 7FB.
b) Basis of preparation
The condensed consolidated financial information for the year to 31 August
2017 has been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRS") as adopted
for use in the European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The accounting policies adopted
for the year to 31 August 2017 are consistent with those adopted and disclosed
in the Group financial statements for the year to 31 August 2016.
The financial information contained within this preliminary announcement for
the years to 31 August 2017 and 31 August 2016 does not comprise statutory
financial statements within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year to 31 August 2016 have been filed with
the Registrar of Companies and those for the year to 31 August 2017 will be
filed following the Company's annual general meeting. The auditors' report on
the statutory accounts for each of the years to 31 August 2017 and 31 August
2016 is unqualified, does not draw attention to any matters by way of
emphasis, and does not contain any statement under section 498 of the
Companies Act 2006.
Going concern and viability
The Directors have reviewed current performance and cash flow forecasts, and
are satisfied that the Group's forecasts and projections, taking account of
potential changes in trading performance, show that the Group will be able to
operate within the level of its current facilities for the foreseeable future.
The Directors have therefore continued to adopt the going concern basis in
preparing the Group's financial statements.
The Directors have also assessed the Group's prospects and viability over a
three-year period to 31 August 2020. This three-year assessment period was
selected as it corresponds with the Board's strategic planning horizon as well
as the time period over which senior management are remunerated via long-term
incentive plans.
In making this assessment, the Directors took account of the Group's current
financial position, annual budget, three-year plan forecasts and sensitivity
testing. The Directors also considered a number of other factors, including
the Group business model, its strategy, risks and uncertainties and internal
control effectiveness. Whilst the principal risks and uncertainties could
impact future performance, none of them are considered likely, individually or
collectively, to affect the viability of the business during the three-year
assessment period. The Group is operationally strong with a robust balance
sheet and cash position, and has a track record of delivering profitable and
sustainable growth, which is expected to continue.
Based on this assessment, there is a reasonable expectation that the Group
will continue in operation and meet all its liabilities as they fall due
during the period up to 31 August 2020.
Changes to accounting standards
The accounting policies applied are consistent with those adopted and
disclosed in the Group financial statements for the year to 31 August 2016.
Various new accounting standards and amendments were issued during the year,
none of which have an impact on the current year.
The following accounting standards are in issue but not yet effective and have
not been adopted by the Group:
• IFRS 9 'Financial Instruments' replaces IAS 39 'Financial
Instruments Recognition and Measurement'. The standard is effective for
accounting periods beginning on or after 1 January 2018. The Group has
completed an assessment of IFRS 9 and it is expected that adoption will not
have a material impact on the results or financial position of the Group.
• IFRS 15 'Revenue from Contracts with Customers' replaces IAS 18
'Revenue'. This standard is effective for accounting periods beginning on or
after 1 January 2018. The Group has completed an assessment of IFRS 15 and it
is expected that adoption will not have a material impact on the results or
financial position of the Group.
• IFRS 16 'Leases' is effective for periods beginning on or after 1
January 2019. Early adoption is permitted if IFRS 15 has also been adopted.
The standard will require lease liabilities and the right of use assets for
leases to be recognised on the Statement of Financial Position. The Group has
completed an assessment of IFRS 16. The net impact on the income statement
between the old and the new leasing standards is immaterial, and a recognition
of leased assets and liabilities will be presented on the balance sheet.
2. Segmental analysis
IFRS 8 'Operating Segments' requires operating segments to be determined based
on the Group's internal reporting to the Chief Operating Decision Maker. The
Chief Operating Decision Maker has been determined to be the Executive Board
who receive information on the basis of the Group's operations in key
geographical territories, based on the Group's management and internal
reporting structure. The Executive Board assesses the performance of each
segment based on revenue and gross profit after distribution expenses, which
excludes administrative expenses.
Year to 31 August 2017
UK US EU RoW Total
£m £m £m £m £m
Retail sales 698.2 261.6 544.1 372.6 1,876.5
Delivery receipts 16.1 6.3 10.8 7.6 40.8
Third party revenues 6.0 0.2 0.1 - 6.3
Total revenue 720.3 268.1 555.0 380.2 1,923.6
Cost of sales (389.7) (103.5) (292.4) (179.7) (965.3)
Gross profit 330.6 164.6 262.6 200.5 958.3
Distribution expenses (81.9) (69.2) (89.8) (58.3) (299.2)
Segment result 248.7 95.4 172.8 142.2 659.1
Administrative expenses (579.5)
Operating profit from continuing operations 79.6
Finance income 0.4
Profit before tax 80.0
Year to 31 August 2016
UK US EU RoW Total
£m1 £m1 £m1 £m1 £m1
Retail sales 603.8 179.2 374.9 245.8 1,403.7
Delivery receipts 15.3 5.5 7.3 6.4 34.5
Third party revenues 6.4 0.1 0.1 0.1 6.7
Internal revenues - - - 3.0 3.0
Total segment revenue 625.5 184.8 382.3 255.3 1,447.9
Eliminations - - - (3.0) (3.0)
Total revenue 625.5 184.8 382.3 252.3 1,444.9
Cost of sales (331.0) (72.9) (202.5) (116.3) (722.7)
Gross profit 294.5 111.9 179.8 136.0 722.2
Distribution expenses (72.8) (46.8) (54.2) (42.2) (216.0)
Segment result 221.7 65.1 125.6 93.8 506.2
Administrative expenses (443.2)
Exceptional items (Note 3) (20.9)
Operating profit from continuing operations 42.1
Finance income 0.7
Profit before tax from continuing operations 42.8
Loss before tax from discontinued operations (10.1)
Profit before tax 32.7
Due to the nature of its activities, the Group is not reliant on any
individual major customers. No analysis of the assets and liabilities of each
operating segment is provided to the Chief Operating Decision Maker in the
monthly management accounts. Therefore no measure of segments assets or
liabilities is disclosed in this note. The total amount of non-current assets
located in the EU is £46.1m (2016: £9.1m).
1 All numbers have been restated to remove the results of the discontinued
operation in China
3. Exceptional items
Year to 31 August 2017 Year to 31 August 2016
£m £m
Legal settlement - 20.9
Exceptional items - 20.9
No exceptional items have been identified for the year to 31 August 2017.
In the comparative period to 31 August 2016, the Group settled its trademark
infringement disputes with high-performance cycle wear manufacturer Assos of
Switzerland GmbH, and German menswear retailer Anson's Herrenhaus KG. This
resulted in a one-off exceptional legal settlement cost of £20.9m (including
associated legal fees) representing full, final and global settlement of all
outstanding litigation.
4. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
the owners of the parent company by the weighted average number of ordinary
shares in issue during the year. Own shares held by the Employee Benefit Trust
and Capita Trust are eliminated from the weighted average number of ordinary
shares.
Diluted earnings per share is calculated by dividing the profit attributable
to the owners of the parent company by the weighted average number of ordinary
shares in issue during the period, adjusted for the effects of potentially
dilutive share options.
Year to 31 August 2017 Year to 31 August 2016
No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for basic earnings per share 82,996,217 82,972,285
Weighted average effect of dilutive options 712,861 224,372
Weighted average shares in issue for diluted earnings per share 83,709,078 83,196,657
Earnings attributable to owners of the parent company (£m)
From continuing operations 64.1 34.7
From discontinued operations - (10.3)
64.1 24.4
Basic earnings per share:From continued operations 77.2p 41.8p
From discontinued operations - (12.4p)
Basic earnings per share from all operations: 77.2p 29.4p
Diluted earnings per share:
From continued operations 76.6p 41.7p
From discontinued operations - (12.4p)
Diluted earnings per share from all operations: 76.6p 29.3p
5. Reconciliation of cash and cash equivalents
Year to 31 August 2017 Year to 31 August 2016
£m £m
Net movement in cash and cash equivalents (13.3) 52.9
Opening cash and cash equivalents 173.3 119.2
Effect of exchange rates on cash and cash equivalents 0.3 1.2
Closing cash and cash equivalents 160.3 173.3
The Group has in place a £20.0m revolving loan credit facility available until
October 2018, none of which has been drawn down at the year end.
6. Contingent liabilities
From time to time, the Group is subject to various legal proceedings and
claims that arise in the ordinary course of business, which due to the
fast-growing nature of the Group and its ecommerce base, may concern the
Group's brand and trading name or its product designs. All such cases brought
against the Group are robustly defended and a liability is recorded only when
it is probable that the case will result in a future economic outflow which
can be reliably measured.
At 31 August 2017, there were no other pending claims or proceedings against
the Group which were expected to have a material adverse effect on its
liquidity or operations. The Group had contingent liabilities of £19.1m (2016:
£7.3m) in relation to supplier standby letters of credit, rent deposit deeds
and other bank guarantees. The likelihood of a cash outflow in relation to
these contingent liabilities is considered to be low.
7. Financial instruments
There are no changes to the categories of financial instruments held by the
Group.
Year to 31 August 2017 Year to 31August 2016
£m £m
Financial assets
Derivative assets used for hedging at fair value 3.6 -
Loans and receivables1 176.3 179.0
Financial liabilities
Derivative liabilities used for hedging at fair value (66.8) (76.0)
Amortised cost2 (474.2) (364.9)
1Loans and receivables include trade and other receivables and cash and cash
equivalents, and excludes prepayments
2Included in financial liabilities at amortised cost are trade payables,
accruals and other payables
The Group operates internationally and is therefore exposed to foreign
currency transaction risk, primarily on sales denominated in US dollars, Euros
and Australian dollars. The Group's policy is to mitigate foreign currency
transaction exposures where possible and the Group uses financial instruments
in the form of forward foreign exchange contracts to hedge future highly
probable foreign currency cash flows.
These forward foreign exchange contracts are classified above as derivative
financial liabilities and are classified as Level 2 financial instruments
under IFRS 13, "Fair Value Measurement." They have been fair valued at 31
August 2017 with reference to forward exchange rates that are quoted in an
active market, with the resulting value discounted back to present value. All
forward foreign exchange contracts were assessed to be highly effective during
the period to 31 August 2017 and a net unrealised gain of £15.8m
(2016: loss of £82.3m) was recognised in equity. All derivative financial
liabilities at 31 August 2017 mature within two years based on the related
contractual arrangements.
8. Related parties
The Group's related party transactions are with the Employee Benefit Trust,
Capita Trust, key management personnel and other related parties. There have
been no material changes to the Group's related party transactions during the
year to 31 August 2017.
This information is provided by RNS
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