Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
Hi guys. Now the hype has died down, I wanted to ask the usual suspects what is meant by "timing effects" and why they can be so certain things WILL be reversed?
"EBIT is expected around the bottom of the guided £40m to £60m range, with free cash inflow in H2 now expected to be c.£60m excluding refinancing costs10 (previously £150m), principally as a result of timing effects that will reverse in September and October. All other guidance remains unchanged."
Analysts know nothing. Brokers know nothing... Could anyone predict the poor summer weather? If there is a sudden war, or earthquake, or mass fraud scandal, could anyone predict that happening?
Stop guessing every day lol
For long holders, its great news. Forget the numbers, follow the narrative.
Section at the bottom is all about returns improving, which we all wanted. Stock has been addressed, which we also wanted... They've made strides in improving the fundementals again IMO
What more did you want!? Profitability increased, returns decreased, stock decreased. Overal sales fell in line with the whole market...
ASOS isnt valued on its profit, at the moment its valued on chances of survival, and this update shows the recovery is continuing well... Unexpected, good or bad, is not what we want. Consistent improvement is!
Strategic update and post close trading update
The Company has continued to execute on its Driving Change agenda. The following progress was made
during the period:
• Adjusted H2 EBIT6 up more than 100% year-on-year (“YoY”) and H2 cashflow improving by
c.£140m despite double-digit revenue decline, reflecting material improvements to core
profitability and strong inventory management.
• Sales declined 15% YoY in P4, in-line with guidance, with a stronger start to the period followed
by weaker performance in July and August amidst a deterioration in the UK clothing market7
.
• Despite the decline in sales, P4 will be another profitable quarter. c.£300m of profit improvement
and cost savings have now been realised, in-line with the FY23 target set under the Driving Change
agenda, driving order profitability8 up more than 35% YoY.
• Adjusted gross margin9 up c.150bps YoY in H2 (vs. guidance up c.200bps), driven primarily by
lower freight and duty costs, partially offset by tactical investment in promotional activity to
prioritise stock reduction in a challenging trading environment.
• As such, inventory down c.30% YoY, ahead of guidance, supporting the transition to the new
commercial model in FY24 and beyond.
• Pivot to faster stock model on track with c.500 Test & React options launched on c.2-week lead
times, with c.60% of each product launch selling through in seven days and stock turning c.3x
faster than average.
• EBIT is expected around the bottom of the guided £40m to £60m range, with free cash inflow in
H2 now expected to be c.£60m excluding refinancing costs10 (previously £150m), principally as a
result of timing effects that will reverse in September and October. All other guidance remains
unchanged.
• Cash and undrawn facilities totalling c.£430m at year-end, providing substantial liquidity following
the refinancing and equity raise announced in May 2023.
The day before the update we've all be waiting for, and I'm seeing people talk themselves into thinking holding is a bad idea... Get a grip people.
Im not one to tell anybody what to do with their money, but if your strategy has been hold for the update, and you believed in the plan for the last month or so, then don't let the chimp in your brain sell you short at the last leg of the race.
Also, can we stop doom mongering and start the positive speculation, because ive waited weeks for tomorrow, and like any good sporting event, Ive been looking foward to the pre match commentry the most... Go ASOS go... Go ASOS go. Wave those pom poms boys, profits coming home.