Online fashion retailer ASOS hails 'good start' to year despite China woes
Online fashion firm ASOS posted a double-digit hike in half-year profits, but revealed further losses from its ill-fated Chinese business.
The group hailed a "good start" to its financial year after a bumper festive season helped pre-tax profits surge 18% higher to £21.2 million in the six months to February 29.
It was boosted by record sales over online discount days Black Friday and Cyber Monday in the run-up to Christmas, which saw it handle up to nine orders a second.
This helped UK retail sales lift by a quarter to £289.5 million, while international sales were 24% higher at £359.1 million with exchange rates stripped out.
But the results showed ASOS counted the cost of its failed Chinese venture, with interim losses of £2.7 million, following losses of £3.1 million a year earlier.
ASOS, which stands for As Seen On Screen, said it was pulling the plug on its Chinese arm last week, with the group to trade via ASOS.com rather than a local website.
The group's half-year figures also showed ASOS expects to suffer around another £1 million in losses from the China venture before trading ends later this year, while last week it said it would take a £10 million hit from the closure.
ASOS will continue to push its other overseas operations, with international sales now accounting for more than half of group turnover.
It said US retail sales rose by 34% with exchange rate effects stripped out, while sales grew by 31% on a constant currency basis across the EU.
Chief executive Nick Beighton, who took over from founder Nick Robertson last year , said the profits rise showed "improving momentum" in the business.
He added: " We've had a good start to the year and I'm pleased with progress on a number of fronts."
The firm, which targets fashion-conscious 20-somethings, said nearly half of all orders were made through its mobile app, with 3.2 million app downloads in the first six months of the year.
Shares leapt 6% higher as the half-year results beat City expectations.
Steve Clayton, head of equity research at Hargreaves Lansdown, said: " Asos may be drawing the curtain across its loss-making Chinese operations, but its performance in key markets more than make up for that disappointment."