Asos raised £247 million pounds (€281m-$308m) with the placement of 15,805,943 new ordinary shares. The British online fashion retailer said that the cash call was intended to protect it against a prolonged downturn stemming from the current Covid-19 pandemic and to position the business for long-term growth.
The shares represent 18.8 percent of the company’s ordinary capital prior to the transaction. The shares were sold at 1,560 pence each. About 95 percent of the shares were allocated to existing shareholders.
The company’s results for the fiscal first half ended on Feb. 29 showed a 21 percent increase, both in pounds and in local currencies, in group revenues to £1,597 million (€1,818.3m-$1,988.5m), while pre-tax profit rose by 653 percent to £30.1 million.
Retail sales were also up by 21 percent, rising by 20 percent in the U.K., by 21 percent in the European Union, by 25 percent in the U.S. and by 20 percent in the rest of the world.
The company said that the results were driven by a “revitalised” product range and presentation. The company also benefited from “strong” customer acquisition and retention
It noted that since the end of its fiscal first half, consumer demand had been “significantly” impacted since containment measures were introduced in several countries, prompting sales to fall by 20-25 percent. Asos stressed that disruption in product sourcing from China is now minimal and that it is closely monitoring sourcing out of Europe.
The company’s warehouses remain operational, but at lower capacity as it has introduced social-distancing measures. Where possible, head office staff are working from home, while discretionary costs and capital expenditures have been reduced. Asos plans to make use of a government-sponsored support scheme, including payment deferrals and job retention programs.
Asos said that stress tests indicated that it had sufficient liquidity under its existing £350 million (€398.5m-$435.8m) revolving credit facility (RCF). Nevertheless, it was finalizing talks to secure a £60-80 million 12-month extension to the RCF, with adjustments to the related loan covenants.
Meanwhile, the company has appointed Patrik Silén as chief strategy officer, reporting to the chief executive officer, Nick Beighton. Silén comes from the consultancy McKinsey & Company, where he spent 16 years and was appointed as a partner in 2012. He will start at Asos on May 5 and will be in charge of developing and implementing the company’s strategy