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(Alliance News) - Online fashion retailer ASOS said Thursday it plans to move to the London Main Market from AIM.
ASOS has dominated the junior market for the past 20 years as its largest, or one of its largest, stocks, with a market capitalisation of GBP2.45 billion.
"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.
The company 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 - is the chair of Bank of Ireland Group.
ASOS also provided a trading update for the last four months of 2021.
Total revenue rose by 2% 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.
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 it full-year guidance remains unchanged at 10% to 15% revenue growth and adjusted pretax profit of GBP110 million to GBP140 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.
ASOS shares were up 8.5% at 2,450.00 pence.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 7,536.86
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Hang Seng: up 0.1% at 24,429.77
Nikkei 225: closed down 1.0% at 28,489.13
S&P/ASX 200: closed up 0.5% at 7,474.40
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DJIA: closed up 38.30 points, 0.1%, at 36,290.32
S&P 500: closed up 0.3% at 4,726.35
Nasdaq Composite: closed up 0.2% at 15,188.39
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EUR: up at USD1.1463 (USD1.1425)
GBP: up at USD1.3730 ((USD1.3693)
USD: down at JPY114.50 (JPY114.73)
Gold: up at USD1,826.88 per ounce (USD1,822.60)
Oil (Brent): down at USD84.24 a barrel (USD84.68)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's key economic events still to come
0930 GMT UK BoE quarterly bank liabilities survey
1030 EST US EIA weekly natural gas storage report
0830 EST US producer price index
0830 EST US initial jobless claims
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A second consecutive day of almost unilaterally negative coverage by the press of UK Prime Minister Boris Johnson features widespread calls for his resignation after his apology during Prime Minister's Questions. Johnson admitted at the beginning of PMQs he attended a lockdown party in the No 10 garden on 20 May, 2020. He offered an apology but said he thought it classified as a work event and therefore would fall within the rules. In response to repeated calls to resign from members of opposition parties, including Labour Leader Keir Starmer, Johnson asked an official inquiry be allowed to "establish the facts". Much of Thursday's media coverage focused on growing discontent within the PM's own party. The Guardian says his future is on a 'knife's-edge', with some Conservative MPs openly calling for his resignation while others speak off-the-record.
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BROKER RATING CHANGES
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Jefferies raises Mears Group to 'Buy' (Hold) - price target 275 (210) pence
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BofA cuts IAG to 'Neutral' (Buy) - price target 180 (240) pence
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Morgan Stanley resumes Smiths Group with 'Equal-Weight' - target 1,580 pence
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COMPANIES - FTSE 100
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Tesco, the UK's largest supermarket chain, said it delivered a strong third quarter and Christmas trading performance, bolstered by the grocer's "unwavering" commitment to value for customers. For the 19 weeks to January 8, like-for-like retail sales were up 2.6% compared to the same period the year before. Over the Christmas period alone, like-for-like sales grew 3.2% year-on-year. Tesco said as a result of stronger-than-expected sales to date, it now expects retail operating profit for financial 2022 slightly above the top-end of its previous GBP2.5 billion to GBP2.6 billion guidance range. It posted retail operating profit of GBP1.99 billion in financial 2021. "Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest ever festive range. This put us in a strong position to meet customers' needs as, once again, Covid-19 led to a greater focus on celebrating at home. As a result, we outperformed the market, growing market share and strengthening our value position," said Chief Executive Officer Ken Murphy.
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Housebuilder Persimmon hailed its "excellent" performance throughout 2021 and said the long-term fundamentals of the UK housing market remain strong. Persimmon said it delivered 14,551 new home completions in 2021, up from 13,575 in 2020, with an average selling price of GBP237,050, up from GBP230,534. The York-based housebuilder said total revenue in 2021 was GBP3.61 billion, up from GBP3.33 billion in 2020. New housing revenue was GBP3.45 billion, up from GBP3.13 billion. Addressing sector concerns, Persimmon said it agreed with the UK government that leaseholders should not have to pay to remove flammable cladding. Persimmon said it constructed only a "very small proportion" of buildings affected by this issue, which caused the deadly fire at the Grenfell Tower in 2017. In common with the rest of the housebuilding industry, it will shortly begin paying the cladding levy announced in the UK budget, it noted.
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In addition, Persimmon appointed Jason Windsor as its new chief financial officer, hired from insurer Aviva to succeed Mike Killoran, who will be retiring in mid-January. Aviva noted the announcement and said a search for a new CFO is underway.
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Pharmaceutical firm AstraZeneca has signed a collaboration agreement with Scorpion Therapeutics. Astra will pay Scorpion USD75 million upfront in cash and will have an exclusive over up to three drugs developed using the Scorpion drug discovery platform. The partnership will develop oncology treatments, focusing on hard-to-target cancer proteins. "The new collaboration focuses on a class of proteins called transcription factors, which control gene expression and can regulate important cellular processes including cell growth and survival," Astra explained. "Many transcription factors have long been identified as important targets for new cancer treatments and as drivers of disease, but have previously been considered 'undruggable' using conventional drug discovery approaches."
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COMPANIES - FTSE 250
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Food, clothing and homewares retailer Marks & Spencer said it put in a strong performance in its financial third quarter and over the Christmas period. For the 13 weeks to January 1, group sales were GBP3.27 billion, up 19% from the same time a year before. As a result of performance over the period, M&S said it was more confident of its ability to deliver the increased guidance it set, and now expects full-year profit before tax and adjusting items of at least GBP500 million. "Trading over the Christmas period has been strong, demonstrating the continued improvements we've made to product and value. Clothing & Home has delivered growth for the second successive quarter, supported by robust online and full price sales growth. Food has maintained its momentum, outperforming the market over both 12 and 24 months," said CEO Steve Rowe.
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COMPANIES - GLOBAL
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Crown Resorts said it has received a revised takeover proposal from US private equity firm Blackstone. The Australian gambling operator said the offer was AUD13.10 per Crown Resorts share in cash. This is a AUD0.60 increase compared to Blackstone's previous offer of AUD12.50 per share in cash received back in November and is the third offer by Blackstone. Blackstone's original offer was for AUD11.85 per share in cash. Crown shares closed up 8.8% to AUD12.65 in Sydney on Thursday. Blackstone already has a 10% stake in Crown Resorts, having bought the shares from Melco Resorts & Entertainment Ltd for AUD8.15 per share in April 2020.
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Thursday's shareholder meetings
Blue Prism Group PLC - GM re takeover by SS&C Technologies
Centrica PLC - GM re sale of Spirit Energy
JPMorgan Japanese Investment Trust PLC - AGM
Kefi Gold & Copper PLC - GM re share placing
Victoria PLC - GM re issue of preferred shares
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
