REG - ASOS PLC - Interim Results <Origin Href="QuoteRef">ASOS.L</Origin> - Part 2
01/04/2015 07:11
- Part 2: For the preceding part double click ID:nRSA0706Ja
131,616 98,873 119,301
Current assets
Inventories 161,571 154,640 161,480
Trade and other receivables 18,589 19,110 20,385
Derivative financial assets (Note 8) 12,338 1,418 2,240
Current tax asset - - 2,217
Cash and cash equivalents (Note 6) 64,891 36,914 74,340
257,389 212,082 260,662
Current liabilities
Trade and other payables (167,820) (135,201) (185,539)
Current tax liability (1,397) (1,806) -
(169,217) (137,007) (185,539)
Net current assets 88,172 75,075 75,123
Non-current liabilities
Deferred tax liability (1,138) (535) (1,393)
Net assets 218,650 173,413 193,031
Equity attributable to owners of the parent
Called up share capital 2,920 2,920 2,920
Share premium 6,901 6,901 6,901
Employee Benefit Trust reserve (5,184) (2,343) (5,330)
Hedging reserve 12,338 1,418 2,240
Translation reserve (355) (165) (221)
Retained earnings 202,705 164,832 186,927
219,325 173,563 193,437
Non-controlling interests (675) (150) (406)
Total equity 218,650 173,413 193,031
CONDENSED UNAUDITED Consolidated Statement of Cash Flows
For the six months ended 28 February 2015
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating profit 17,957 19,981 46,646
Adjusted for:
Depreciation of property, plant and equipment 3,673 3,044 5,860
Amortisation of other intangible assets 6,701 4,450 9,501
Loss on disposal of non-current assets 52 93 150
Decrease/(increase) in inventories 111 (11,499) (18,352)
Decrease/(increase) in trade and other receivables 1,808 (821) (1,844)
(Increase)/decrease in trade and other payables (14,093) (15,172) 33,522
Share-based payments charge/(credit) 1,082 2,527 (2,813)
Other non-cash items 269 (75) (297)
Income tax paid (145) (2,346) (3,714)
Net cash generated from operating activities 17,415 182 68,659
Investing activities
Payments to acquire other intangible assets (15,213) (16,636) (32,627)
Payments to acquire property, plant and equipment (11,748) (17,623) (29,750)
Finance income 123 146 296
Acquisition of subsidiary, net of cash acquired - 182 182
Net cash used in investing activities (26,838) (33,931) (61,899)
Financing activities
Proceeds from issue of ordinary shares - 563 563
Net cash inflow/(outflow) relating to Employee Benefit Trust 38 (632) (3,914)
Finance expense (62) (64) (65)
Net cash used in financing activities (24) (133) (3,416)
Net (decrease)/increase in cash and cash equivalents (9,447) (33,882) 3,344
Opening cash and cash equivalents 74,340 71,139 71,139
Effect of exchange rates on cash and cash equivalents (2) (343) (143)
Closing cash and cash equivalents 64,891 36,914 74,340
Notes to the CONDENSED UNAUDITED financial information
For the six months ended 28 February 2015
1. Preparation of the condensed unaudited consolidated financial information
a) Basis of preparation
The interim financial statements for the six months ended 28 February 2015
have been prepared in accordance with IAS 34, "Interim Financial Reporting" as
adopted by the European Union. The interim financial information should be
read in conjunction with the Group's Annual Report and Accounts for the year
ended 31 August 2014, which has been prepared in accordance with IFRSs as
adopted by the European Union.
The interim consolidated financial information contained in this report has
been reviewed, not audited, and does not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The Annual Report and
Accounts for the year ended 31 August 2014 has been filed with the Registrar
of Companies. The auditors' report on those accounts was unqualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
s498(2) or s498(3) of the Companies Act 2006.
The Group's business activities together with the factors that are likely to
affect its future developments, performance and position are set out in the
Business Review. The Business Review describes the Group's financial position,
cash flows and borrowing facilities.
The interim financial statements were approved by the Board of Directors on 31
March 2015.
Going concern
The Directors have reviewed current performance and forecasts, combined with
expenditure commitments, including capital expenditure. After making
enquiries, the Directors have a reasonable expectation that the Group has
adequate financial resources to continue its current operations, including
contractual and commercial commitments for the foreseeable future. For this
reason, they have continued to adopt the going concern basis in preparing the
interim financial statements.
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, this condensed set
of consolidated financial statements have been prepared in accordance with IAS
34 "Interim Financial Reporting" as adopted by the European Union, and that
the interim management report includes a fair review of the information
required.
Accounting policies
The interim financial statements have been prepared in accordance with the
accounting policies set out in the Annual Report and Accounts for the year
ended 31 August 2014. Various new accounting standards and amendments were
issued during the period, none of which have had or are expected to have any
significant impact on the Group, and none of which have been adopted early.
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to the expected total annual earnings.
2. Principal risks and uncertainties
The Board considers the principal risks and uncertainties which could impact
the Group over the remaining six months of the financial year to 31 August
2015 to be unchanged from those set out in the Annual Report and Accounts for
the year ended 31 August 2014, summarised as follows:
- Market risks, including maintaining our market position and
fashionability, failure to meet customer demand and meet the needs of changing
customer tastes
- Technological risk, including robustness and sufficiency of IT systems
and infrastructure, and failure to adopt technological innovations
- Financial risks, including exposure to changes in interest and foreign
exchange rates
- Supply chain risks, including interruption to supply of core category
products and disruption to delivery services or warehousing activities
- Brand and reputational risks
- Reliance on key personnel
These are set out in detail on pages 16 to 18 of the Group's Annual Report and
Accounts for the year ended 31 August 2014, a copy of which is available on
the Group's website, www.asosplc.com. Information on financial risk management
is also detailed on pages 69 to 70 of the Annual Report.
3. 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
and has determined that the primary segmental reporting format of the Group is
geographical by customer location, 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.
Six months to 28 February 2015 (unaudited)
UK US EU RoW Total
£'000 £'000 £'000 £'000 £'000
Retail sales 231,370 54,528 136,228 114,303 536,429
Delivery receipts 5,440 1,554 2,214 2,560 11,768
Third party revenues 2,277 - - - 2,277
Internal revenues 376 - - 1,309 1,685
Total segment revenue 239,463 56,082 138,442 118,172 552,159
Eliminations (376) - - (1,309) (1,685)
Total revenue 239,087 56,082 138,442 116,863 550,474
Cost of sales (132,045) (23,344) (71,170) (58,716) (285,275)
Gross profit 107,042 32,738 67,272 58,147 265,199
Distribution expenses (25,050) (17,239) (18,092) (18,390) (78,771)
Segment result 81,992 15,499 49,180 39,757 186,428
Administrative expenses (174,770)
Net other income 6,299
Operating profit 17,957
Finance income 145
Finance expense (58)
Profit before tax 18,044
Internal revenues relate largely to sale of stock by ASOS.com to ASOS
(Shanghai) Commerce Co. Limited.
Six months to 28 February 2014 (unaudited)
UK US EU RoW Total
£'000 £'000 £'000 £'000 £'000
Retail sales 182,040 46,749 127,626 115,904 472,319
Delivery receipts 3,410 835 1,582 1,717 7,544
Third party revenues 1,863 - - - 1,863
Internal revenues - - - 400 400
Total segment revenue 187,313 47,584 129,208 118,021 482,126
Eliminations - - - (400) (400)
Total revenue 187,313 47,584 129,208 117,621 481,726
Cost of sales (100,182) (20,131) (63,325) (55,001) (238,639)
Gross profit 87,131 27,453 65,883 62,620 243,087
Distribution expenses (17,896) (15,100) (17,784) (22,164) (72,944)
Segment result 69,235 12,353 48,099 40,456 170,143
Administrative expenses (150,162)
Operating profit 19,981
Finance income 168
Finance expense (52)
Profit before tax 20,097
Year to 31 August 2014 (audited)
UK US EU RoW Total
£'000 £'000 £'000 £'000 £'000
Retail sales 372,241 92,311 256,385 234,358 955,295
Delivery receipts 7,412 1,773 3,162 3,604 15,951
Third party revenues 4,224 - - - 4,224
Internal revenues 111 - - 7,654 7,765
Total segment revenue 383,988 94,084 259,547 245,616 983,235
Eliminations (111) - - (7,654) (7,765)
Total revenue 383,877 94,084 259,547 237,962 975,470
Cost of sales (207,853) (40,137) (126,460) (116,013) (490,463)
Gross profit 176,024 53,947 133,087 121,949 485,007
Distribution expenses (39,618) (28,804) (37,062) (41,819) (147,303)
Segment result 136,406 25,143 96,025 80,130 337,704
Administrative expenses (294,108)
Net other income 3,050
Operating profit 46,646
Finance income 312
Finance expense (57)
Profit before tax 46,901
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.
There are no material non-current assets located outside the UK.
4. Net other income
Net other income recognised during the six months ended 28 February 2015
relates to final business interruption reimbursements as a result of the fire
in our main distribution hub in June 2014. Amounts recognised during the year
to 31 August 2014 related to insurance reimbursements related to stock loss
and other incremental costs plus a portion of business interruption losses.
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Stock loss and other incremental costs - - (8,486)
Insurance reimbursements 6,299 - 11,536
Total 6,299 - 3,050
At 31 August 2014, the Group disclosed a contingent asset in relation to these
expected final business interruption reimbursements. This contingent asset no
longer exists as at 28 February 2015 as a result of the reimbursements
received above.
5. 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.
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
No. of shares No. of shares No. of shares
Weighted average share capital
Weighted average shares in issue for basic earnings per share 82,921,082 82,707,823 82,845,587
Weighted average effect of dilutive options 64,978 442,819 279,864
Weighted average shares in issue for diluted earnings per share 82,986,060 83,150,642 83,125,451
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings
Underlying earnings attributable to owners of the parent 14,578 15,407 36,950
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
Pence Pence Pence
Earnings per share
Basic earnings per share 17.6 18.6 44.6
Diluted earnings per share 17.6 18.5 44.5
6. Reconciliation of cash and cash equivalents
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net movement in cash and cash equivalents (9,447) (33,882) 3,344
Opening cash and cash equivalents 74,340 71,139 71,139
Effect of exchange rates on cash and cash equivalents (2) (343) (143)
Closing cash and cash equivalents 64,891 36,914 74,340
The Group has a £20m revolving loan credit facility which includes an
ancillary £10m guaranteed overdraft facility and which is available until July
2015. We expect to renegotiate this loan facility during the second half of
the year.
7. Capital expenditure and commitments
During the period, the Group acquired property, plant and equipment of £9.7m
and intangible assets of £13.9m. Disposals were immaterial. At the period end
capital commitments contracted, but not provided for by the Group, amounted to
£2.6m.
8. Financial instruments
There are no changes to the categories of financial instruments held by the
Group.
Six months to 28 February 2015 Six months to 28 February 2014 Year to 31 August 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Financial assets
Loans and receivables1 75,595 48,349 86,058
Derivative financial assets 12,338 1,418 2,240
Financial liabilities
Amortised cost2 (165,152) (133,015) (181,481)
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 assets and are classified as Level 2 financial instruments under
IFRS 13, "Fair Value Measurement." They have been fair valued at 28 February
2015 with reference to spot exchange rates that are quoted in an active
market. All forward foreign exchange contracts were assessed to be highly
effective during the period to 28 February 2015 and a net unrealised gain of
£10,098,000 (2014: £1,193,000) was recognised in equity. All derivative
financial assets at 28 February 2015 mature within one year based on the
related contractual arrangements.
9. Related Parties
The Group's related parties are the Employee Benefit Trust, Capita Trust and
key management personnel. There have been no material changes to the Group's
related party transactions during the six months to 28 February 2015.
Independent review report to ASOS PLC
Introduction
We have been engaged by the Company to review the interim results for the six
months ended 28 February 2015, which comprises the condensed consolidated
statement of total comprehensive income, condensed consolidated statement of
financial position, condensed consolidated statement of changes in equity,
condensed consolidated cash flow statement and related notes. We have read the
other information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the AIM Rules for Companies
which require that the financial information must be presented and prepared in
a form consistent with that which will be adopted in the company's annual
financial statements.
As disclosed in Note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with the International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the AIM Rules for Companies and for no
other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 28 February 2015 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the AIM Rules for Companies.
The condensed interim financial statements for the period ended 28 February
2014 forming the corresponding figures of the condensed interim financial
statements for the period ended 28 February 2015 have not been reviewed.
PricewaterhouseCoopers LLP
Chartered Accountants
31 March 2015
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