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I hope you’re right!
Agree that soccer performance UK team should be left outside the discussion, but we must take in effect the euro24, olympics and tour de france this summer as a positive thing for the growing sportswear department of ASOS. The story is still the same for me, we need better consumer confidence and sign of proof that the turnaround is working. Fortune comes to the bold and patient in business. Sentiment now is fear driven and very negative with a lot of bearish talk now, as a contrarian a good sign for a coming upside soon in the market before elections in the US. If ASOS delivers on the turnaround SP will react.. Focus at the business, SP is now a playfield for traders with a different mindset.Those who think debt will sink this ship should look at the costs of creating brands like ASOS, topshop, the suppliers patnerships, 21 M customers. The bigger problem is leadership, if they do not deliver in Q4/Q1 they are out and I trust the big 3 shareholders will protect their investments. Have a great summer and look forward to oct update.
*England winning the Euros? Lol did you see the match against Denmark?*
I did ...
Lackluster performance might be what the team needs. Next time they come out storming (maybe).
England winning the Euros? Lol did you see the match against Denmark?
I suspect behind the dreary share price and short activity, this is ticking along quite nicely. Judging the company against it's old model, may allow for some surprise come Oct/Nov. Of course, England winning the Euros and a summer of hot weather might help....
Fashion and furniture shopping help UK retail sales rebound in May
(Adds par 8 and final 6 pars)
By Anna Wise, PA Business Reporter
A rebound in the number of shoppers flocking to fashion and furniture stores helped boost retail sales last month, after wet weather dampened spending in April, according to new official figures.
The quantity of items bought rose by 2.9% in May, following a fall of 1.8% in April, the Office for National Statistics said. April’s data has been revised up from a previous estimate of a 2.3% decrease.
The figure has beaten forecasts, with some economists expecting sales to rise by a softer 1.6% last month.
The volume of sales rose across most sectors last month, compared with April, when poor weather reduced the number of people shopping.
Clothing retailers, furniture, footwear, sports equipment, games and toy stores had a strong month, thanks to more visitors, warmer weather and the impact of promotions.
Florists also helped drive a 3.5% increase in total non-food store sales in May, which includes department stores and homeware shops.
This was the biggest monthly rise in three years, the ONS said.
Online clothes shopping also soared by nearly a tenth in May, while the total amount spent online across all sectors rose by 5.4%.
Meanwhile, watches and jewellery retailers and second-hand goods stores were among those seeing a slight fall in spending compared with the previous month.
Experts said that a summer of sporting events is likely to prompt more spending, which could further boost retailers.
“The numerous bank holidays in May provided retailers with a much-needed sales boost, according to the latest figures from the ONS,” said Silvia Rindone, EY’s UK and Ireland retail lead.
“A summer packed with high-profile sporting events such as Uefa Euro 2024 and the Paris Olympics, coupled with better weather and the possibility of political changes, could well be the catalyst for a resurgence in consumer confidence.
“While these upcoming events are beyond retailers’ control, they present a golden opportunity to drive sales.”
Oliver Vernon-Harcourt, head of retail at Deloitte, said the latest figures suggest that “recessionary behaviours are easing”, with more consumers “releasing their purse strings and spending on discretionary items such as clothing and furniture”.
The UK economy dipped into a recession at the end of last year, but returned to growth over the start of 2024.
*Gains were led by clothing and footwear retailers, furniture stores, and sports equipment, games and toys stores, amid improved footfall, better weather, and the impact of promotions. Also, sales at non-store retailers, which are predominantly online retailers, rose by 5.9%, the largest monthly increase and index level since April 2022.*
https://tradingeconomics.com/united-kingdom/retail-sales
*It said underlying earnings in FY24-25 are set to be "significantly" higher than the previous two years as it cuts costs and slashes stock levels. Chief executive Jose Antonio Ramos Calamonte said 2023-24 "is about taking the necessary action to get us to that path".*
Get back to the office and make this happen!
Hope that the ending is not the same as the book/movie...
Nice recovery today :)
Makes sense.. £85m of the £130m I believe already spent in H1 (from CF) - so I guess £45m in H2.
Well a £100m WC swing would certainly be a relief, albeit one-off
The business normally has robust Cash Flow from Ops in 2H primarily because of the swing in WC from negative to positive. For the past three years, CF from Ops was £188m, £26m, and £119m in 2H. So you are right that the cash flow will primarily come from WC swing.
It says it wants inventories at 2020 levels which is £530m although it says £600m which it is now at. I reckon it will bring down inventories further as it exits low margin/loss making product lines.
The company has guided that capex will be £130m this year versus £178m last year.
In short, I reckon it will be: 1) seasonal WC swing; 2) further structural inventory reductions, and 3) lower capex.
Assuming H2 revenue of say £1.7bn and EBIT margin of (say) 3% that's about £50m - and that's optimistic. Then you have c.£45m Capex and £20m interest. You'd need a big working capital swing to get a positive cash flow of that magnitude, I think.
What am I missing?
Hi Roberto,
I reckon we could be on for £100m for the full year.
https://asos-12954-s3.s3.eu-west-2.amazonaws.com/files/3217/1139/0009/HY24_Trading_Statement_FINAL_250324.pdf
According to the following website, consensus sell side analysts have it at £76m for full fiscal year.
https://uk.marketscreener.com/quote/stock/ASOS-PLC-4003595/finances/
How much do you expect the H2 FCF to be? The only guidance we have is positive EBITDA in H2 but nothing on cash flow I believe?
Net debt is c.£350m and refinance is in 2026. So basically as I mentioned before no margin of error
So the opponents say that the £500m debt refinancing is a threat.
I'm not so sure. The liklihood is that we will have strong FCF generation in 2H. Cashflow is seasonally stronger is 2H and the 1H was bolstered by inventory destocking. This could bring down the net debt significantly.
The CFO will be waiting for as long as possible as interest rates will start to fall in the coming months. If they can generate strong cash flow in 2H and issue guidance that shows a stability in the business, then it will be much easier to refinance at a lower rate.
I actually see this as a deleveraging story. Investors value Asos on an enterprise value ( EV = market cap + debt - cash). If it managed to pay off all its debt in a few years, then this would translate into an increase in market cap if the enterprise value was to remain the same. Given the level of debt, this could result in a doubling of the market cap.
I think the risk of a capital raise with the share price where it is is fairly low. The 1H report essentially says cash flow will be good this fiscal year. Provided it can show stable outlook, credit investors should have no problem with Asos rolling
I am happy for Calamonte to stay on but I do think the next results need to show strong positive FCF and a return to stable revenues in FY25.
FY24 is the last year for clearing the inventory and exiting unprofitable product lines. I do not think the FY24 guidance is tough hurdle for them to meet but Calamonte's job would be in jeopardy if we had a "profit" warning or weak FY25 guidance.
I have seen retailers restructure before (Victoria's Secret) and it is a painful exercise for investors. I think Calmonte is doing all the right things and he does have an excellent career pedigree (McKinsey consultant to Inditex).
If the share price continues to drift down, then I would expect management to take some proactive steps in giving good news to the market. I suspect share price will remain weak but will rebound before the results.
UK markets are a shorters paradise.
Expect an attack to bring this down to new lows. £2.50ish.
Interest rates going down will not save this.
Any share with lots of debt being punished and priced for bankruptcy.
This is not going up anymore on good news but does go further down on any slightest bad news.
Ah well, nevermind. :)
Thought you knew of some actual news then lol
Shorts up, SP in free fall, Calamonte in the hideout
Why, what news has come out to suggest this needs to be brought up?
I believe it's time to bring this topic back into the debate....
UK voted for Brexit, over 100 K drivers short. See the same with our incoming import products we source from UK for our BNL, Germany, France business. Since Brexit costs went up and service down. Anyway, i foresee the equity markets in the to go up soon. There is simply to much negativity in the media, never a sign of a top. US will lead the rally and i anticipate the EU and UK to join.