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(Alliance News) - ASOS emerged as a clear winner from the pandemic shift to online shopping on Thursday, while bricks-and-mortar retailer Dunelm saw its digital offering soothe the pain of store closures.
ASOS said it delivered a strong performance in the first half of the financial year as the fast-fashion retailer continued to benefit from the online shopping craze during the Covid-19 pandemic.
For the six months to February 28, revenue increased 24% to GBP1.98 billion from GBP1.60 billion at the same time the year before and pretax profit more than tripled to GBP106.4 million from GBP30.1 million. ASOS said first half retail sales alone jumped 24% to GBP1.92 billion from GBP1.55 billion as its customer base increased by 1.5 million to 24.9 million during six months.
"ASOS has undoubtedly been a beneficiary of the consumer shifts accelerated by Covid-19, particularly in the UK and most of Europe," the online-only fashion retailer said.
Meanwhile, though quarterly sales fell overall at bricks-and-mortar retailer Dunelm, it said that digital sales more than trebled.
For the third quarter to March 27, total sales were GBP236.6 million, down 17% from GBP284.4 million at the same time last year as the majority of the home furnishing retailer's store estate was shuttered in the period due to virus restrictions.
However digital sales - which includes click & collect and home delivery - surged to make up 92.4% of total sales from 22.5% a year before.
"Our digital sales have more than trebled since the same period last year, enabled by ongoing enhancements to the customer experience and our operational capabilities. The strength of our digital proposition, operating through home delivery and Click & Collect services, allowed us to cover over 83% of prior year sales," said Dunelm.
Assuming the majority of its stores open as expected this coming Monday, and no further virus restrictions in the current financial year, Dunelm expects a full-year result "modestly ahead" of the top of the current range of analyst expectations.
Dunelm shares were up 3.1% in early trade in London, while ASOS rose 1.6%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 27.38 points, or 0.4%, at 6,912.70
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Hang Seng: up 1.3% at 29,032.50
Nikkei 225: closed down 0.1% at 29,708.98
DJIA: closed up 16.02 points at 33,446.26
S&P 500: closed up 0.2% at 4,079.95
Nasdaq Composite: closed down 0.1% at 13,688.84
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EUR: down at USD1.1878 (USD1.1891)
GBP: up at USD1.3771 (USD1.3747)
USD: up at JPY109.64 (JPY109.72)
Gold: up at USD1,743.40 per ounce (USD1,739.40)
Oil (Brent): up at USD62.63 a barrel (USD62.08)
(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
1100 CEST EU PPI
0800 CEST Germany manufacturing orders
1100 BST Ireland industrial production
1100 BST Ireland CPI
0930 BST UK CIPS/Markit construction PMI
0830 EDT US unemployment insurance weekly claims report
1030 EDT US EIA weekly natural gas storage report
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Prime Minister Boris Johnson has sought to reassure the public the Oxford/AstraZeneca PLC vaccine is safe after UK regulators said there was a possible link between the jab and "extremely rare" blood clots. The Medicines & Healthcare products Regulatory Agency said the benefits still outweigh the risks overall but while it has not concluded that the vaccine causes rare brain clots, it said the link is getting firmer. Regulators have recommended that people aged 18 to 29 should be offered the Pfizer, Moderna or other vaccines that come on stream as the programme continues to rollout across the UK. It comes as the family of a solicitor who died from a blood clot after receiving an AstraZeneca vaccine urged the public to "keep saving lives" by taking up a jab when offered it. The prime minister sought to boost public confidence in the Oxford-developed shot as he said the changes in its use would not force a change in the road map out of lockdown.
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UK house sales picked up sharply in March amid signs that the extension of a stamp duty holiday had an immediate impact on the housing market, according to surveyors. A net balance of 50% of property professionals reported an increase rather than a decrease in agreed sales, the Royal Institution of Chartered Surveyors said. It marked the strongest sales surge since last August. A stamp duty holiday had been due to end on March 31, but this was extended in the recent budget. The stamp duty "nil rate" band will now not revert to normal levels until the autumn. The current stamp duty threshold under the holiday is GBP500,000. This will fall to GBP250,000 from July 1, and from October 1 it will fall to GBP125,000, where it usually sits.
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The decline in UK retail footfall eased in March, data from an industry body showed on Thursday, as the sector begins to lap easier comparatives roughly one year following the first nationwide lockdown to combat coronavirus. According to the latest Springboard monitor, footfall in UK retail destinations was down 28% yearly in March, improved from February's 61% plunge. Springboard noted the anniversary of the first lockdown came during the penultimate week of March. England is currently in its third national lockdown, though retail destinations can lift shutters once again on Monday next week. "Pent up demand from shoppers for bricks and mortar stores was ever more evident in the results for March 2021, with footfall strengthening over the month in all three destination types," Springboard said.
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BROKER RATING CHANGES
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BERENBERG STARTS DELIVEROO WITH 'HOLD' - PRICE TARGET 310 PENCE
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DEUTSCHE BANK STARTS TUI WITH 'HOLD' - PRICE TARGET 4.40 EUR
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COMPANIES - FTSE 100
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Johnson Matthey said its financial 2021 operating performance is expected to be around the top end of market expectations. The speciality chemicals company said following disruption from Covid-19, its second half was materially stronger. Johnson Matthey attributed the performance to increased activity in autos and other key end markets and actions taken to transform its operations, including tight cost management. Further, its strong operational performance has enabled continued investment into strategic growth projects. Johnson Matthey said it continues to review its portfolio to focus on areas to maximise value for shareholders. As part of that process, the company is undertaking a strategic review of its Health business. In the Clean Air division, Johnson Matthey said there was a strong recovery in demand across all regions towards the end of the first half following a period of disruption caused by the coronavirus pandemic.
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COMPANIES - MAIN MARKET AND AIM
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Lookers said it first quarter performance was better than expected, despite virus restrictions. The motor retail and aftersales service company sold over 44,000 new and used vehicles which, though down on 49,000 a year before, was combined with a resilient aftersales performance and strong control of costs. "Given ongoing uncertainty around both Covid-19 and consumer sentiment, the board believes it is right to remain cautious about the outlook for the remainder of the year. However, based on the better than expected performance in Q1, the board's expectation for underlying profit before tax for the full year ended 31 December 2021 is now materially ahead of the current analyst consensus," said Lookers.
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COMPANIES - GLOBAL
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Westpac Banking noted an Australian regulator has accused the company of wrongfully selling consumer credit insurance to nearly 400 customers. The Australian Securities & Investments Commission said that between April and July 2015, the financial services firm offered credit cards and other lending facilities to roughly 384 customers who had not agreed to buy the policies. "The proceedings relate to allegations that Westpac supplied CCI to certain customers who had not requested or agreed to acquire this product. ASIC is seeking, among other things, declarations of contraventions of certain civil penalty provisions and unspecified monetary penalties relating to the period from 7 April 2015 to 28 July 2015," Westpac said. "Westpac is carefully considering these claims and is committed to working constructively with ASIC through the court process."
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Facebook on Wednesday launched an experimental online forum called Hotline, an attempt by the social media giant to keep up with the live audio trend made popular by the likes of Clubhouse. Social media stalwarts are scrambling to prevent users from being lured away by audio-only online rivals. The Facebook application is essentially a spin on Reddit's Ask Me Anything sessions and Clubhouse, the audio-only social media sensation launched a year ago which has boomed during the pandemic. Hotline provides users with a blend of voice, text and video options for participating in online discussions with hosts. Users can ask questions in writing, which is not possible on Clubhouse. Speakers, meanwhile, can choose who to invite "on stage" to speak.
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Thursday's Shareholder Meetings
Octopus Renewables Infrastructure Trust PLC - AGM
RM PLC - AGM
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By Lucy Heming;Â lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
