REG - ASOS PLC - Interim Results <Origin Href="QuoteRef">ASOS.L</Origin> - Part 2
04/04/2017 07:13
- Part 2: For the preceding part double click ID:nRSD4477Ba
Equity attributable to owners of the parent Non-controlling interest Total equity
£m £m £m £m £m £m £m £m £m
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 September 2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4 - 200.4
Profit for the period - - 21.9 - - - 21.9 - 21.9
Other comprehensive income/(loss) for the period - - - - 21.8 (0.9) 20.9 - 20.9
Total comprehensive income/(loss) for the period - - 21.9 - 21.8 (0.9) 42.8 - 42.8
Net cash received on exercise of shares from EBT2 - - - 0.6 - - 0.6 - 0.6
Transfer of shares from EBT2 on exercise - - (0.3) 0.3 - - - - -
Share-based payments charge - - 3.4 - - - 3.4 - 3.4
Deferred tax - - 0.6 - - - 0.6 - 0.6
At 28 February 2017 2.9 6.9 280.3 (1.7) (38.2) (2.4) 247.8 - 247.8
Called up share capital Share premium Retained earnings1 Employee Benefit Trust reserve2 Hedging reserve Translation reserve Equity attributable to owners of the parent Non-controlling interest Total equity
£m £m £m £m £m £m £m £m £m
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
At 1 September 2015 2.9 6.9 225.1 (3.6) 6.3 (0.3) 237.3 - 237.3
Profit for the period - - 15.2 - - - 15.2 - 15.2
Other comprehensive income/(loss) for the period - - 8.4 - (43.2) (0.6) (35.4) - (35.4)
Total comprehensive income/(loss) for the period - - 23.6 - (43.2) (0.6) (20.2) - (20.2)
Transfer of shares from EBT2 on exercise - - (0.2) 0.2 - - - - -
Share-based payments charge - - 2.1 - - - 2.1 - 2.1
At 29 February 2016 2.9 6.9 250.6 (3.4) (36.9) (0.9) 219.2 - 219.2
Called up share capital Share premium Retained earnings1 Employee Benefit Trust reserve2 Hedging reserve Translation reserve Equity attributable to owners of the parent Non-controlling interest Total equity
£m £m £m £m £m £m £m £m £m
At 1 September 2015 2.9 6.9 225.1 (3.6) 6.3 (0.3) 237.3 - 237.3
Profit for the year - - 24.4 - - - 24.4 - 24.4
Other comprehensive loss for the year - - - - (66.3) (1.2) (67.5) - (67.5)
Total comprehensive income/(loss) for the year - - 24.4 - (66.3) (1.2) (43.1) - (43.1)
Net cash received on exercise of shares from EBT2 - - - 0.7 - - 0.7 - 0.7
Transfer of shares from EBT2 on exercise - - (0.3) 0.3 - - - - -
Share-based payments charge - - 5.0 - - - 5.0 - 5.0
Deferred tax on share options - - 0.5 - - - 0.5 - 0.5
Balance as at 31 August 2016 2.9 6.9 254.7 (2.6) (60.0) (1.5) 200.4 - 200.4
1Retained earnings includes the share-based payments reserve
2Employee Benefit Trust and Capita Trust
CONDENSED UNAUDITED Consolidated Statement of Financial PositioN
At 28 February 2017
At28 February 2017 At29 February 2016 At 31 August 2016
(unaudited) (unaudited) (audited)
£m £m £m
Non-current assets
Goodwill 1.1 1.1 1.1
Other intangible assets (Note 5) 142.6 91.8 112.4
Property, plant and equipment (Note 5) 90.5 66.9 77.2
Deferred tax asset 7.9 2.3 13.3
242.1 162.1 204.0
Current assets
Inventories 249.0 198.0 257.7
Trade and other receivables 24.9 23.2 15.0
Deferred tax asset - 0.9 -
Cash and cash equivalents (Note 6) 154.3 135.9 173.3
428.2 358.0 446.0
Current liabilities
Trade and other payables (367.0) (258.8) (370.7)
Derivative financial liabilities (Note 7) (44.8) (25.3) (55.0)
Current tax liability (6.9) (5.2) (2.9)
(418.7) (289.3) (428.6)
Net current assets 9.5 68.7 17.4
Non-current liabilities
Derivative financial liabilities (Note 7) (3.8) (11.6) (21.0)
(3.8) (11.6) (21.0)
Net assets 247.8 219.2 200.4
Equity attributable to owners of the parent
Called up share capital 2.9 2.9 2.9
Share premium 6.9 6.9 6.9
Employee Benefit Trust reserve (1.7) (3.4) (2.6)
Hedging reserve (38.2) (36.9) (60.0)
Translation reserve (2.4) (0.9) (1.5)
Retained earnings 280.3 250.6 254.7
Total equity 247.8 219.2 200.4
CONDENSED UNAUDITED Consolidated Statement of Cash Flows
For the six months ended 28 February 2017
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(unaudited) (unaudited) (audited)
£m £m £m
Operating profit from continuing operations 27.1 23.7 42.1
Loss before tax from discontinued operations - (2.7) (10.1)
Operating profit 27.1 21.0 32.0
Adjusted for:
Depreciation of property, plant and equipment 5.7 5.1 10.5
Amortisation of other intangible assets 15.8 9.8 21.2
Loss on disposal of non-current assets from continuing operations 0.1 - 0.8
Loss on disposal of non-current assets from discontinued operations - - 4.3
Decrease/(increase) in inventories 8.7 (4.2) (63.8)
(Increase)/decrease in trade and other receivables (10.3) (5.1) 4.2
(Decrease)/increase in trade and other payables (6.1) 23.4 128.7
Share-based payments charge 3.4 1.6 4.5
Other non-cash items (1.0) (0.3) (1.7)
Income tax paid (1.2) (3.5) (10.0)
Net cash generated from operating activities 42.2 47.8 130.7
Investing activities
Payments to acquire other intangible assets (46.1) (23.3) (55.7)
Payments to acquire property, plant and equipment (16.3) (8.6) (23.5)
Finance income 0.2 0.4 0.8
Net cash used in investing activities (62.2) (31.5) (78.4)
Financing activities
Net cash inflow relating to EBT1 0.6 - 0.7
Finance expense - (0.1) (0.1)
Net cash generated/(used) in financing activities 0.6 (0.1) 0.6
Net (decrease)/increase in cash and cash equivalents (19.4) 16.2 52.9
Opening cash and cash equivalents 173.3 119.2 119.2
Effect of exchange rates on cash and cash equivalents 0.4 0.5 1.2
Closing cash and cash equivalents 154.3 135.9 173.3
1 Employee Benefit Trust and Capita Trust
Notes to the CONDENSED UNAUDITED financial information
For the six months ended 28 February 2017
1. Preparation of the condensed unaudited consolidated financial information
("interim financial statements")
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.
The interim financial statements have been reviewed, not audited and were
approved by the Board of Directors on 3 April 2017.
b) Basis of preparation
The interim financial statements for the six months ended 28 February 2017
have been prepared in accordance with IAS 34, "Interim Financial Reporting" as
adopted by the European Union. The interim financial statements should be read
in conjunction with the Group's Annual Report and Accounts for the year ended
31 August 2016, which has been prepared in accordance with IFRSs as adopted by
the European Union.
The interim financial statements have been reviewed, not audited, and do 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 2016 have 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 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
and cash flows.
Going concern
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.
Changes to accounting standards
Various new accounting standards and amendments were issued during the period,
none of which have had an impact in the current period. The impact of new
standards which are not yet effective are currently under review by the Group,
including IFRS 9 'Financial Instruments, IFRS 15 'Revenue from Contracts with
Customers' and IFRS 16 'Leases'.
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, the interim
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 2016.
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
2017 to be unchanged from those set out in the Annual Report and Accounts for
the year ended 31 August 2016, summarised as follows:
- Technological risk including the ability to recover sufficiently from
loss of data, robustness and sufficiency of IT systems and infrastructure, and
IT capacity and capability keeping pace with business growth and complexity
- Financial risks, including ensuring our UK business model is profitable
on a scalable basis in key territories and managing exposure to changes in
foreign exchange rates
- Market risks, including failure to meet customer demand and changing
tastes, understanding additional costs to meet ecommerce drivers, maintaining
our market position and fashionability, or an inadequate digital experience
- Supply chain risks, including interruption to supply of core category
products and disruption to delivery services or warehousing activities and
capacity
- Reputational risks around (a) our brand name, including trade mark
oppositions, legal claims and formal litigation as a result of failure or
inability to support and protect our brand, trademarks and domain names, (b)
the security of our customer and business data, including unauthorised access
to or breach of our systems and records and (c) adhering to product quality or
ethical trading standards
- Reliance on key personnel
These are set out in detail on pages 20 to 24 of the Group's Annual Report and
Accounts for the year ended 31 August 2016, a copy of which is available on
the Group's website, www.asosplc.com. Information on financial risk management
is also detailed on pages 81 to 82 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 2017 (unaudited)
UK US EU RoW Total
£m £m £m £m £m
Retail sales 340.8 124.3 248.9 175.2 889.2
Delivery receipts 7.6 2.9 4.9 3.9 19.3
Third party revenues 2.9 0.1 - - 3.0
Total segment revenue 351.3 127.3 253.8 179.1 911.5
Cost of sales (195.7) (50.4) (138.6) (86.7) (471.4)
Gross profit 155.6 76.9 115.2 92.4 440.1
Distribution expenses (38.7) (33.1) (39.3) (29.1) (140.2)
Segment result 116.9 43.8 75.9 63.3 299.9
Administrative expenses (272.8)
Operating profit 27.1
Finance income 0.2
Profit before tax 27.3
Six months to 29 February 2016 (unaudited) 1
UK US EU RoW Total
£m £m £m £m £m
Retail sales 289.5 76.8 167.9 110.4 644.6
Delivery receipts 7.2 2.7 3.2 2.8 15.9
Third party revenues 2.4 0.1 - 0.1 2.6
Total segment revenue 299.1 79.6 171.1 113.3 663.1
Cost of sales (160.4) (31.9) (91.9) (54.9) (339.1)
Gross profit 138.7 47.7 79.2 58.4 324.0
Distribution expenses (33.2) (22.7) (23.3) (18.0) (97.2)
Segment result 105.5 25.0 55.9 40.4 226.8
Administrative expenses (203.1)
Operating profit 23.7
Finance income 0.2
Profit before tax continuing operations 23.9
Loss before tax from discontinued operations (2.7)
Profit before tax 21.2
1For the six months to 29 February 2016, numbers have been restated to
remove the results of the discontinued operation in China
Year to 31 August 2016 (audited)
UK US EU RoW Total
£m £m £m £m £m
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 (20.9)
Operating profit from continuing operations 42.1
Finance income 0.7
Profit before tax 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.
There are no material non-current assets located outside the UK.
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.
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(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 82,986,398 82,967,753 82,972,285
Weighted average effect of dilutive options 418,556 15,015 224,372
Weighted average shares in issue for diluted earnings per share 83,404,954 82,982,768 83,196,657
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(unaudited) (unaudited) (audited)
£m £m £m
Earnings
Earnings attributable to owners of the parent 21.9 15.2 24.4
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(unaudited) (unaudited) (audited)
Pence Pence Pence
Earnings per share from continuing operations
Basic earnings per share 26.4 22.8 41.8
Diluted earnings per share 26.3 22.8 41.7
Loss per share from discontinued operations
Basic loss per share - (4.5) (12.4)
Diluted loss per share - (4.5) (12.4)
Earnings per share
Basic adjusted earnings per share 26.4 18.3 29.4
Diluted adjusted earnings per share 26.3 18.3 29.3
5. Capital expenditure and commitments
During the period, the Group capitalised property, plant and equipment of
£19.0m and intangible assets of £46.1m. Disposals were immaterial. At the
period end capital commitments contracted, but not provided for by the Group,
amounted to £10.1m.
6. Reconciliation of cash and cash equivalents
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(unaudited) (unaudited) (audited)
£m £m £m
Net movement in cash and cash equivalents (19.4) 16.2 52.9
Opening cash and cash equivalents 173.3 119.2 119.2
Effect of exchange rates on cash and cash equivalents 0.4 0.5 1.2
Closing cash and cash equivalents 154.3 135.9 173.3
The Group has a £20.0m revolving loan credit facility which includes an
ancillary £10.0m guaranteed overdraft facility and which is available until
October 2018, none of which has been drawn down as at 28 February 2017.
7. Financial instruments
There are no changes to the categories of financial instruments held by the
Group.
Six months to 28 February 2017 Six months to 29 February 2016 Year to 31 August 2016
(unaudited) (unaudited) (audited)
£m £m £m
Financial assets
Loans and receivables1 167.0 149.0 179.0
Financial liabilities
Derivative liabilities used for hedging at fair value (48.6) (36.9) (76.0)
Amortised cost2 (360.8) (248.5) (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 28
February 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 28 February 2017 and a net unrealised gain of £27.4m (H1 2016:
loss of £43.2m) was recognised in equity. All derivative financial liabilities
at 28 February 2017 mature within two years based on the related contractual
arrangements.
8. 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 2017.
9. 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 e-commerce base, may concern the Group's
brand and trading name or its product designs. At 28 February 2017, there were
no pending claims or proceedings against the Group which were expected to have
a material adverse effect on its liquidity or operations.
At 28 February 2017, the Group had contingent liabilities of £6.4m (H1 2016:
£3.8m) in relation to supplier standby letters of credit, rent deposit deeds
and other bank guarantees. The likelihood of cash outflow in relation to these
contingent liabilities is considered low.
Independent review report to ASOS PLC
Report on the condensed unaudited financial information
Our conclusion
We have reviewed ASOS plc's condensed unaudited financial information (the
"interim financial statements") in the half-yearly report of ASOS plc for the
6 month period ended 28 February 2017. Based on our review, nothing has come
to our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
· the condensed unaudited consolidated statement of financial position as
at 28 February 2017;
· the condensed unaudited consolidated statement of total comprehensive
income for the period then ended;
· the condensed unaudited consolidated statement of cash flows for the
period then ended;
· the condensed unaudited consolidated statement of changes in equity for
the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly report have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the AIM Rules for
Companies.
As disclosed in Note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half-yearly report, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly 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.
Our responsibility is to express a conclusion on the interim financial
statements in the half-yearly report based on our review. This report,
including the conclusion, has been prepared for and only for the company for
the purpose of complying with the AIM Rules for Companies and for no other
purpose. We do not, in giving this conclusion, 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.
What a review of interim financial statements involves
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.
We have read the other information contained in the half-yearly report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
St Albans
4 April 2017
This information is provided by RNS
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