ASOS spending plans spook market, Tesco comes up trumps, Page Group hedging its bets

“The FTSE 100 slipped back a little in early trading as investors took stock after yesterday’s substantial gains,” says AJ Bell investment director Russ Mould.


“Today’s interim results from online fashion retailer ASOS are getting a cool reception as the company ups capex guidance for its August 2018 financial year to between £230m and £250m.

“This offers a reminder that, although not burdened with the same level of overheads as traditional retailers, it does incur material costs on items like distribution and logistics.

“In this context a current forward price to earnings ratio upwards of 60 makes for an interesting comparison with other internet-based businesses with arguably more limited working capital requirements. Property site Rightmove, for example, trades on a multiple of around 25.”


“Results from supermarket Tesco show the benefits of CEO Dave Lewis’ back to basics approach as it posts a 28% increase in operating profit boosted by better-than-expected sales growth in the final quarter of its financial year.

“Lewis deserves significant credit for getting things back on track after a very troubled period but after the dust settles on these numbers the market may start to look at what is next for the business.

“Top of the agenda will be the integration of recently acquired wholesaler Booker but Tesco also faces the challenge of adapting to continuing shifts in consumer trends.”

Page group

“Recruitment business Page Group shares are falling despite a record first quarter for the group. The reason for the weakness could be an underwhelming UK performance and a fairly downbeat outlook statement alongside the update.

“While management are comfortable with 2018 consensus forecasts for now, a reference to several macro-economic uncertainties like Brexit, strikes in France and elections in Brazil suggest they may be hedging their bets.”

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