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(Alliance News) - Online fashion retailer ASOS on Thursday revealed plans to move to the London Main Market, saying it has outgrown AIM after 20 years, most of that time as its biggest listing.
ASOS, which stands for "as seen on screen", long dominated the junior market, though its current market capitalisation of GBP2.42 billion places it fifth in size on AIM. Currently the largest stock traded on AIM is Hutchmed (China) Ltd with a GBP4.18 billion market cap, followed by Abcam PLC and Fevertree Drinks PLC. The move would also put ASOS in contention to join the FTSE 250 index.
ASOS shares were up 8.2% at 2,443.00 pence in London on Thursday morning.
"ASOS directors believe that given ASOS's size and scale, now is the appropriate time to move from AIM to a premium Main Market listing," the company said, explaining it thinks the move will raise its corporate profile and recognition, and increase investment in its shares by global institutions.
ASOS said it will move its listing by the end of February. JP Morgan will act as sponsor for the Main Market admission, which won't involve any fund raise.
In conjunction with the shift, ASOS has hired Patrick Kennedy as senior independent director. Kennedy, the former chief executive of Irish betting firm Paddy Power - now Flutter Entertainment PLC - is the chair of Bank of Ireland Group PLC. He holds 23,000 ASOS shares, which are worth about GBP560,000.
ASOS also provided a trading update for the last four months of 2021.
Total revenue rose by 2.1% to GBP1.39 billion from GBP1.36 billion a year before. In constant currency, the increase was 5%. UK sales rose by 13%, while EU sales rose by 2% and US sales by 11%, both at constant currency. However, Rest of World sales fell by 15% at constant currency and by 20% at actual rates.
ASOS said that while UK sales benefited from Britons going out once again, the fourth wave of Covid-19 limited this in Europe. In the US, ASOS note significant port congestion and supply chain disruption, restricting its ability to fulfil orders. ROW sales also were hurt by "the continued impact of extended delivery propositions".
Gross margin narrowed by 400 basis points to 43.0%, as expected, ASOS said, due to clearance activity. The product returns rate has normalised in line with expectations.
ASOS said that, despite uncertainty related to the Omicron variant of Covid-19, its full-year guidance remains unchanged at 10% to 15% revenue growth and adjusted pretax profit of GBP110 million to GBP140 million. In the financial year that ended August 31, 2021, ASOS recorded GBP3.91 billion in revenue, up from GBP3.26 billion the year before, with adjusted pretax profit of GBP193.6 million, up from GBP142.1 million.
"Our listing on AIM for the past 20 years has been an important part of ASOS's development, but the time is now right to move to the Main Market as we focus on delivering our medium-term guidance and longer-term growth ambitions," said Chief Operating Officer Mat Dunn.
By Tom Waite; thomaslwaite@alliancenews.com
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