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(Alliance News) - Online fashion retailer ASOS on Monday said Chief Executive Nick Beighton is stepping down, as it warned on profit in the year ahead due to cost pressures and the falling away of Covid-19-related benefits.
ASOS unveiled a board shake-up alongside its annual results, which had been scheduled for Thursday.
These showed a profit hike. However, the fast fashion firm warned on the year ahead amid supply chain issues and other cost pressures.
Revenue for the financial year to August 31 jumped 20% to GBP3.91 billion as retail sales grew 19% to GBP3.78 billion, while pretax profit rose 25% to GBP177.1 million.
However, sales growth in the year ahead is expected to be in the range of 10% to 15%, with interim revenue growth in "mid-single digits". This reflects tougher comparables and industry-wide supply chain pressures. The company expects sales to accelerate in the second half of the year and has laid out plans to generate GBP7 billion of annual revenue over the medium-term.
Adjusted pretax profit for the 2022 financial year is expected around GBP110 million to GBP140 million. This would be well below the GBP193.6 million registered for the financial year just ended.
ASOS flagged "notable cost headwinds", including inbound freight costs, Brexit duty annualisation, outbound delivery costs and labour cost inflation. It also said financial 2021 adjusted profit included GBP67.3 million in Covid-19-rated benefit.
"Looking ahead, while our performance in the next 12 months is likely to be constrained by demand volatility and global supply chain and cost pressures, we are confident in our ability to capture the sizeable opportunities ahead," said Chief Financial Officer & Chief Operating Officer Mat Dunn.
ASOS shook up its board to "underpin delivery of the next phase of its global growth strategy". CEO Beighton is stepping down after 12 years with ASOS, including six as CEO, and a search is underway for his replacement.
CFO Dunn has added the COO role and will run day-to-day operations, effective immediately. Katy Mecklenburgh, currently director of group finance, has become interim CFO.
Chair Adam Crozier, whose decision to step down was previously announced, will be succeeded by Senior Independent Non-Executive Director Ian Dyson.
"Over the last three years we have made significant progress...At the same time, however, we recognise that there is more to do to accelerate the pace and intensity of commercial execution," said Crozier.
ASOS shares were down 8.9% early Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 2.59 points at 7,092.96
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Hang Seng: up 1.9% at 25,296.59
Nikkei 225: closed up 1.6% at 28,498.20
DJIA: closed 8.69 points at 34,746.25
S&P 500: closed down 8.42 points, or 0.2%, at 4,391.34
Nasdaq Composite: closed down 74.48 points, or 0.5%, at 14,579.54
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EUR: firm at USD1.1585 (USD1.1578)
GBP: up at USD1.3673 (USD1.3645)
USD: up at JPY112.69 (JPY112.03)
GOLD: down at USD1,755.21 per ounce (USD1,759.55)
OIL (Brent): up at USD83.49 a barrel (USD83.15)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
IMF and World Bank annual meetings
1000 EDT US employment trends index
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Britain is on a fresh collision course with the EU over the UK Brexit minister's demand to drop the role of the European Court of Justice from the Northern Ireland Protocol. David Frost was accused of using an unassailable "red line" to create a "destabilising stand-off" with Brussels amid indications the government was edging closer to overriding parts of its own post-Brexit agreement. The Tory peer will use a speech in Portugal on Tuesday to say the EU must go further than scrapping its prohibition on British sausages crossing the Irish Sea. He will call for "significant" changes to the protocol he negotiated, including over the role of the European Court of Justice in governing the arrangements in Northern Ireland. But Ireland's foreign minister, Simon Coveney, questioned whether UK ministers "actually want an agreed way forward or a further breakdown in relations?"
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Staff shortages and disruption to companies that supply goods and services across industry are restricting prospects for UK economic recovery, according to a new report. Business advisory firm BDO LLP said its research suggested that growth had slowed for five months in a row. The decline has hit manufacturers and services firms, with many businesses having problems recruiting staff. Kaley Crossthwaite of BDO LLP said: "While a gradual deceleration in the pace of growth is to be expected as economies normalise after the pandemic, it is clear that acute labour shortages and supply chain disruption are weighing heavily on productivity.
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The International Monetary Fund said it still hasn't reached a decision on whether its embattled chief Kristalina Georgieva will keep her job. The lack of clarity over her future comes with the IMF and the World Bank set to begin their fall meetings on Monday. An investigation by a law firm has concluded that Georgieva manipulated data in favor of China while in a senior role at the World Bank. The IMF board met again with representatives of the firm, WilmerHale, and with Georgieva over the weekend. The board said in a statement published late Sunday that it made "further significant progress today in its assessment with a view to very soon concluding its consideration of the matter."
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BROKER RATING CHANGES
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BERENBERG INITIATES KINGFISHER WITH 'HOLD' - TARGET 370 PENCE
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BERENBERG INITIATES WICKES WITH 'BUY' - TARGET 280 PENCE
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BERENBERG INITIATES MADE.COM WITH 'HOLD' - TARGET 165 PENCE
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BERENBERG INITIATES DUNELM GROUP WITH 'BUY' - TARGET 1,620 PENCE
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RBC CUTS BRITVIC TO 'SECTOR PERFORM' ('OUTPERFORM') - TARGET 870 (1,060) PENCE
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COMPANIES - FTSE 100
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AstraZeneca said its long-acting antibody combination reduced severe Covid-19 or death in patients with mild-to-moderate symptoms. The trial met its primary endpoint, with a dose of AZD7442 cutting the risk of developing severe Covid or death by 50% compared to placebo in outpatients who had been symptomatic for seven days or less. A total of 90% of the participants enrolled for the Tackle phase three study were from populations at high risk of progression to severe Covid-19, including those with co-morbidities. AstraZeneca said it will be discussing the data with health authorities, having last week announced the submission of a request to the US Food & Drug Administration for emergency use authorisation for AZD7442.
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COMPANIES - FTSE 250
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Iron-ore miner Ferrexpo set its first decarbonisation targets. It aims to be net zero carbon from its operations by 2050, with a minimum 30% reduction in Scope 1 and 2 emissions by 2030.
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COMPANIES - MAIN MARKET AND AIM
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EDF-backed electric vehicle charging firm Pod Point is mulling a float on the London Stock Exchange. Pod Point, founded in 2009, said it is "one of the original" electric vehicle charging providers in the UK. It expects around 25 million charge points will be needed in the UK by 2040, and its outlook is underpinned by a favourable regulatory and political backdrop. The initial public offer would comprise a primary offer of new shares with proceeds to support Pod Point's growth plans, and an offer of existing shares to be sold by Legal & General Capital Investments. Majority shareholder EDF is expected to retain a stake above 50% after the business floats. "Today marks an exciting milestone for the business. I am looking forward to helping steer Pod Point's superb team to take advantage of the significant growth opportunity ahead of us. I have no doubt that the company will continue to thrive as one of the United Kingdom's leading EV charging companies, delivering further value to all its stakeholders and ensuring that travel does not damage the earth," said Chair Gareth Davis. Davis is chair at M&C Saatchi, and has previously held the same role at other London listings, such as William Hill, Ferguson and DS Smith. He was CEO at Imperial Brands until 2010.
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Tungsten West said it raised GBP39 million in its own IPO on AIM, selling 65.0 million new shares at 60 pence each. The company will have a GBP106.2 million market cap upon the start of trading on October 21. It will use the funds raised to bring the Hemerdon tungsten and tin mine in Devon, west England, back into commercial production.
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Former UK cabinet minister Amber Rudd is joining new special purpose acquisition company Energy1 as an adviser, Sky News reported. Sources told Sky that Energy1 plans to float in London and raise between GBP250 million and GBP300 million. It plans to target an acquisition in the renewable energy sector. An announcement is due by the end of the year, which should note Citi and JP Morgan have been hired to advise on the listing, according to Sky. Energy1 is being established by start-up investor Sanjay Mehta and David Kotler, a former Lazard and Morgan Stanley investment banker who now runs Access Corporate Finance, an energy and natural resources advisory firm, Sky said.
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COMPANIES - GLOBAL
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Credit Suisse's report into its own failings around the collapse of Greensill Capital has been delayed, the Financial Times reported. The bank had hoped to release findings from the investigation it commissioned - carried out by Deloitte and Swiss law firm Walder Wyss - at its third-quarter results in November, the FT reported, citing people briefed on the plans, but that deadline will now be missed. The newspaper explained that the delays were caused by a raid on Credit Suisse's headquarters by Swiss police. Documents were seized two weeks ago in connection with the Zurich public prosecutor's criminal investigation into Greensill's activities and the way in which Credit Suisse funds that financed the British company's contentious lending schemes were managed and marketed. While the Swiss criminal investigation is not currently directed against Credit Suisse, the FT said, there is a fear among some senior staff at the bank that its remit could be extended.
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Monday's Shareholder Meetings
St Peter Port Capital Ltd - EGM re appointment of liquidator
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By Tom Waite; thomaslwaite@alliancenews.com
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