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International sales boost profits at Asos

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Asos today unveiled a sharp rise in profits and sales as its international business continues to grow.

The online fashion retailer, which said it was working to transform itself “from a shop into an engaging experience that permeates our customers’ fashion lives”, now makes 65% of its sales overseas and has 5m active customers.

Releasing results for the five months to its new year end of August 31, it said retail sales rose by 32% in the period to £231m, with UK sales boosted by 13% compared to the same period last year, while international retail sales rose by 46%.

Pre-tax profits before tax and exceptional items rose by 42% to £13.2m, but after exceptional items the rise was of 317%.

The company also released pro-forma results for the year to August 31, its new year-end, which showed retail sales up by 38% to £537.9m, while profits before tax and exceptional items rose by 40% to £44.5m. After exceptional items, pre-tax profits were up by 217% to £40m.

“During the period we improved our product offer in terms of range, quality and price, invested in our customer proposition, made progress in developing the Asos platform and continued to drive efficiencies from the business to fuel our future growth,” said chief executive Nick Robertson. “At the same time we have reached the milestone of 5m active customers worldwide.”

The company said “encouraging” UK sales appeared to have been lifted by a 5% reduction in average selling price. This also had the effect of reducing the average basket value by 6% to £59.64.

But the fastest growth was in the US, where retail sales lifted by 72%. This was driven, said Asos, by “further localising of the trading calendar and content, investment in digital marketing and social media and continuing to develop the service proposition”. Other strong performances came from the Russian, Singapore and Chinese markets. Within the EU, the company reported that countries with their own dedicated websites outperformed, as “we have been able to present them with a more tailored offer”.

The company also reported that its new Barnsley warehouse was performing ahead of expectations and that distribution costs had risen by 55% as a result both of increased order numbers and costs related to improved delivery, including reduced delivery times, increased tracked parcels, and mobile notification. Delivery receipts, however, were up by 12% as the company invested in global free delivery and shorter UK delivery times. The company also said it had received HMRC approval for a bonded warehouse, which would go live in early 2013 and improve both inbound shipping and customer deliveries.

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