ASOS sales up

Online fashion group ASOS reports retail sales up 26% to £1,403.7m in then year to the end of August (2015: £1,112.2m) driven by strong product, delivery improvements and further price investments across its major markets.

the Group gross retail margin decreased by 30bps to 48.5% (2015: 48.8%) as price investments in the US, Europe and RoW were offset by a higher full price mix.

Delivery receipts grew 35% aided by higher next-day delivery usage and the expansion of Premier globally. We also saw an increase of 29% in third-party revenues which had a positive impact on gross margin, which at 50.0% (2015: 50.1%) was only 10bps down compared to last year.

Continuing profit before tax and exceptional items grew by 37% to £63.7m (2015: £46.4m), as investments in delivery proposition, marketing and depreciation were offset by warehouse automation efficiencies and the non-recurrence of last year's £4.9m fixed asset write-offs.

The Group discontinued its in-country China operation which incurred an operating loss before tax of £3.6m up to the point of closure in May 2016 (2015: £5.2m) and one-off exceptional closure costs before tax of £6.5m, of which £4.4m was non-cash. Previously planned investment in China was re-deployed elsewhere.

In September 2016, the Group settled its trademark infringement disputes. This resulted in a one-off exceptional legal settlement of £20.9m (including associated legal fees) representing full, final and global settlement of all outstanding litigation.

Importantly this settlement now allows us to more actively target the significant and growing sportswear market.

The settlement will be paid in the new financial year. Within the comparative results for the year to 31 August 2015, one-off business interruption reimbursements of £6.3m in respect of a warehouse fire in 2014 are also reported as an exceptional item.

Chief executive Nick Beighton said: "I'm pleased with progress in the business. The strength of these results reflects our unwavering focus on delivering great customer experience, supported by rigorous execution of our investments. We continue to target our growth opportunities, so we're accelerating investment in both logistics and technology. The pace at ASOS is continuing in the new financial year, which we are looking forward to with confidence."