TIDMASC

RNS Number : 9478R

ASOS PLC

01 November 2023

1 November 2023

ASOS plc

Global Online Fashion Destination

Final results for the period to 3 September 2023

Turnaround on-track, delivering on "Driving Change" objectives and readying for a profitable return to growth in FY25

Summary financial results

 
 GBPm(1)                      Period to      Year ended                CCY change 
                               3 Sep          31 Aug 2022     Change    (adjusted, LfL)(2,3,4) 
                               2023 (FY23)    (FY22) 
---------------------------  -------------  -------------  ---------  ------------------------ 
 Headline measures 
 Adjusted group revenue(5)    3,538.0        3,936.5                   (11%) 
 Adjusted gross margin(5)     44.2%          43.6%          60bps 
 Adjusted EBITDA(5)           124.5          183.9          (59.4) 
 Adjusted EBIT(5)             (29.0)         44.1            (73.1) 
 Adjusted EBIT margin(5)      (0.8%)         1.1%           (190bps) 
 Adjusted (loss)/profit 
  before tax(5)               (70.3)         22.0            (92.3) 
 Net debt(5)                  (319.5)        (152.9)         (166.6) 
 Free cash outflow(5,6)       (213.0)        (339.8)         126.8 
 Statutory measures 
 Group revenue                3,549.5        3,936.5         (10%) 
 Gross margin                 41.1%          43.6%          (250bps) 
 Operating Loss               (248.5)        (9.8)          (238.7) 
 Loss before tax              (296.7)         (31.9)         (264.8) 
---------------------------  -------------  -------------  ---------  ------------------------ 
 

Strategic update and results summary

-- FY23 in-line with guidance provided in our P4 trading update, with H2 adjusted EBIT up more than 100% year-on-year ('YoY') and FY23 free cashflow(6) up more than GBP125m YoY despite double-digit revenue decline, reflecting material improvements to core profitability and strong inventory management.

-- Executed on Driving Change agenda priorities: reduced stock levels by c.30%, increased profit per order(7) by over 30%, refinanced the balance sheet bringing stability with the removal of profit-based covenants, and refreshed the leadership team to bring new energy and expertise.

-- Significant operational progress: 84% of the c.GBP1.1bn stock carried forward cleared through in the year, stock operating under the new commercial model in H2 delivered stronger sell-through, Test & React pilot for high-fashion product produced c.500 options with lead times of c.two weeks, Partner Fulfils scaled to 33 brands across six markets, and technology now in place to accelerate the rollout and provide ASOS Fulfilment Services on Direct to Consumer product.

-- With strong foundations in place, FY24 will prioritise a shift 'Back to Fashion', leveraging ASOS' strengths to offer the best and most relevant product, styled the ASOS way, with an exciting and seamless customer experience geared around fashion and excitement. This will be supported by GBP30m incremental investment into marketing while maintaining an obsession with operational excellence and disciplined capital allocation.

-- Final cleansing of stock over FY24 will remain a drag on sales growth and profitability through the year. Expect to exit FY24 with majority of stock operating on the new commercial model and inventory restored to pre-COVID levels, Test & React scaled to over 10% of own brand, and 200% growth in Partner Fulfils.

-- Anticipate sales decline of 5% to 15% in FY24, with positive adjusted EBITDA and material cash generation driven by stock sell-through, further reducing net debt. In FY25, we expect to return to growth with EBITDA margin around pre-COVID levels.

José Antonio Ramos Calamonte, Chief Executive Officer said:

"FY23 was a year of good progress for ASOS in a very challenging environment and I am proud of what the business has achieved. We have reduced our stock balance by c.30%, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team. Encouragingly, stock that was brought in under our new commercial model over the summer months has performed strongly and this gives us the confidence to accelerate the rollout of our new processes. As such, we are taking decisive action in FY24 to clear stock brought in under our old model while substantially improving our speed to market and investing in our brand, reminding our customers what we're really about: fashion."

CEO Review

Where were we a year ago?

In my first CEO review 12 months ago, I explained that we had more stock than we'd like, which had eroded our profitability and destabilised our balance sheet; and that some of our customers, brands or activities were simply unprofitable. While external factors had amplified the situation, our focus on growth without due consideration for the cost had contributed significantly and our high level of stock was exacerbated by poor operating practices - we were too slow and inefficient. We launched our Driving Change agenda, framed internally as a two-step plan. Firstly 'Back to Basics', which involved reducing our stock levels, transitioning to a new commercial model; improving profitability; refreshing our leadership team with the energy and talent required to turn things around; and refinancing our balance sheet. This first stage was ultimately about bringing stability and laying solid foundations. Our next step, 'Back to Fashion', is focused on regaining the hearts and minds of our target consumer, accelerating towards our new commercial model, and retaining a disciplined approach to profitability and cash generation.

What have we achieved over the last 12 months?

In FY23 we have refinanced our balance sheet and removed profit-based covenants, providing the flexibility to take the right decisions in the long-term interests of the business, and also returned to cash generation in the second half of the year. Operationally, we comprehensively re-defined our commercial model to align with best-in-class fashion principles: focusing on speed and flexibility of intake with better planning; incentivising sell-through in-season; and clearing stock as-we-go to maintain a healthier stock profile.

We have begun to embed an intense focus on speed and operational excellence throughout our organisation and successfully piloted our best-in-class Test & React model for our highest fashion product, which moves from design to site within two weeks. To increase speed and flexibility with our partner brands, we invested in new technology infrastructure that will enable the rollout of ASOS Fulfilment Services ('AFS') to support our stockless Direct to Consumer ('DTC') model, Partner Fulfils. We empowered a Central Merchandise Planning team with greater control and oversight over forecasting and managing our stock. We sold through 84% of the GBP1.1bn of inventory brought forward from FY22 (GBP130m or 13ppt of which was through the write-off of our oldest stock), reduced intake levels to better align with demand, began to operate Spring Summer ('SS') intake on the new commercial model, and ended the year with a cleaner stock position and c.30% less stock (ahead of our c.20% guidance).

As part of the profit focus under our Driving Change agenda, we delivered the c.GBP300m of profit improvement and cost saving measures designed to mitigate the inflationary and returns rate headwinds and improve core order profitability by over 30%, by exiting or correcting unprofitable brands, customers, and activities. The cost savings are particularly evident in our outbound supply chain with distribution costs as a percentage of sales improving by 120bps due to measures including the discontinuation of UK split orders and favourable negotiations with carriers. We did this while bedding in a new leadership team committed to establishing a culture of operational excellence.

Our progress has been the result of a huge effort by ASOSers, a transformation of our mindset, and a resilience to keep pushing when our results aren't yet reflective of our actions. While some of these initiatives inevitably led to lower customer acquisition and higher levels of churn, the customers that remain are more profitable and therefore sustainable.

Where are we going?

ASOS has over 23m active customers globally, c.GBP3.5bn in revenues, and a highly successful collection of own brands operating at scale. We have an enviably strong position from which to build our future. We have churned unprofitable brands, activities, and customers, many of the latter picked up over the pandemic, but we remain c.30% bigger than FY19, with c.4m additional active customers. In FY24 we will accelerate our plans to transition to our new commercial model, prioritising near-term cash generation and the long-term interests of the business over short-term revenue growth and profitability. The benefits of our new model will become clearly visible in our profitability and growth in FY25 and beyond.

While fashion has always been a fiercely competitive industry, I am very clear on what makes ASOS unique and why we have the right to win market share with a profitable and cash generative model. ASOS is structurally set up to win again by putting speed at the heart of its culture and operations. By obsessively focusing on cultivating our strengths, we can offer an exciting proposition to consumers while also generating attractive returns for our shareholders. This stems from five strategic priorities:

   1.         Best & most relevant product 

We must offer our customers the best assortment - the most exciting fashion from the most relevant brands for fashion-loving 20-somethings, perfectly blended with a set of our own unique brands that can only be found at ASOS. Our own brands are already a key differentiator, with more than two-thirds of our global customer base having purchased an own brand item in the last twelve months, and they are a great customer acquisition tool, with 55% of new customer orders containing an own brand product. The combination of exclusive and relevant own brands with the curation of the most exciting and additive product from partner brands is our critical competitive advantage. This is where we must strive for leadership, invest our energy, and focus our innovation. As a pure-play online retailer, without the volume demands of stocking a global store estate, we can move faster with less risk, but we have not been maximising this competitive advantage. We will move faster in everything we do, work more closely with our brand partners, and obsess over bringing the most relevant fashion product to consumers.

   2.         Destination for style 

ASOS is the only place where brands can show their potential in a perfectly blended fashion context, and the only place where consumers can experience their favourite brands with our differentiated visual language, creating an inspirational, rather than transactional, customer experience. This is a core competitive advantage and where we must continue to differentiate. Our in-house studio shoots all our product, creating a distinct visual identity. This not only drives better engagement with our customers but is critical to our relationships with brand partners, who see a huge opportunity to reach a different customer segment than is often their core. This approach is not new: it has always been a core part of the ASOS proposition. But we will make improvements to our customer experience to translate this critical differentiator more directly into economic benefits.

   3.         A customer journey created around fashion and excitement 

Our target market is fashion-loving 20-somethings. This tightly-defined market segment means we can authentically offer our customers an exciting, engaging, and relevant fashion experience, connecting with them at the earliest stage of their fashion journey and providing inspiration, not just a transaction. Their fashion journey does not begin with performance marketing and promotions - by relying on these activities to drive sales, we can miss the key stages in a customer's journey and risk losing them to peers. Our ability to inspire is a significant competitive advantage, but we must bring that to life for our customers however we engage with them. As we improve our product and double-down on our unique style, we must reignite our brand heat and remind consumers we are first and foremost about fashion, not convenience or discounting. It is our ambition to restore our share of voice and show up at every stage in the customer journey - from discovery to purchase through to loyalty and advocacy. We will build stronger relationships with our best customers and turn them into advocates for our brand.

   4.         Competitive convenience 

Convenience remains a key reason to shop online and we do not overlook its role in our future growth, but we will not look to convenience as a core differentiator. We must always offer a seamless experience, easy to shop, with a competitive delivery proposition, returns policy, and methods of payment. We keep ourselves at the level of our best competitors in this area and will be a fast follower of innovation. We made changes to our proposition over the last year to reflect this, yet we continue to offer delivery within two days to 95% of our customers globally. We also go beyond many peers in our commitment to free returns in core geographies. In some geographies, we have recently introduced paid returns after 14 days, encouraging quicker returns and increasing the likelihood of the product being resold at full price, thus aligning the incentives of our customers with our own interests. We will constantly reassess whether we are investing into the areas that matter most to our customers.

   5.         Disciplined capital allocation 

Our unique value proposition has a flywheel effect on our financials, supporting higher average basket value, stronger full price sell-through, lower returns rates, reduced churn, and faster stock turn, ultimately improving our profitability and cash generation and providing the resources to drive our growth. This is underpinned by operational excellence and efficient capital allocation, allowing us to invest behind our strengths in a disciplined way, relentlessly removing waste to invest into opportunity. We remain committed to our international model, with every region making a positive variable profit contribution in FY23, and we see long-term growth potential in all our core markets. Our core markets (UK, Germany, France, US), are already - or have the potential to be - large and profitable. Accordingly, we will invest our resources significantly into these markets, with dedicated marketing, localised assortment and a best-in-class convenience proposition supported by local infrastructure (i.e., distribution centres). Outside of our core markets, we will typically use central marketing and assortment, leverage adjacent infrastructure, and consider wholesale of our own brand to build brand awareness and supplement our scale. We will constantly reassess the classification of our markets and adapt our approach where necessary to maximise the return on our investment over the mid-term.

Priorities for the year ahead

In FY24 we will focus on delivering three things to develop our competitive advantage:

   1.         More relevant product through disciplined stock management and an obsession with speed 

Managing our stock to optimise value creation

We have significantly intensified our focus on stock management as a critical enabler of our plan to bring the newest and most compelling assortment to our customers. Optimising our stock position and fully transitioning to our new commercial model requires three elements:

   (i)   Eliminating old stock, turning it into cash: 

From FY18 to FY22, our stock levels doubled and so too did our discounts, significantly eroding our gross margin and with it our profitability. While external factors amplified the situation, our stock build-up really was driven by poor operating practices - we were too slow and inefficient and held stock for too long, believing we had limitless "shelf space" and in the knowledge that we could eventually sell the stock profitably. We have made good progress over the last 12 months, clearing 84% of the GBP1.1bn of stock carried forward into the year, GBP130m of which was through a write-off of our oldest stock and clearance off-site. We reduced total inventory by 30%, ahead of the c.20% guided at the beginning of the year. But we must finish the job over the course of the coming months. Over FY24, we will clear the remaining c.16% of FY22 stock left over, together with that carried forward from FY23. Our remaining FY23 stock relates predominantly to the Autumn Winter ('AW') season, for which intake was ordered under our old commercial model.

(ii) A more disciplined, flexible stock purchasing model:

We must also increase the accuracy and flexibility of our purchasing to improve the quality of available product and reduce older stock carried forward in the future. We have put in place more rigorous planning of stock purchasing, with oversight from a central merchandising team, and we are significantly increasing our speed to market and the flexibility of our intake. By reducing the time from design to site, we have better data to support our purchasing decisions. For our highest fashion product developed under our Test & React model, we can test the demand for a product before committing in significant depth. For our partner brands, we are rolling out Partner Fulfils and AFS alongside our wholesale model to increase flexibility for both parties and maximise the availability of the most exciting product while balancing inventory risk. Given the more than 6-month average lead time on product, orders for AW22 were placed before the rollout of our new strategy and as such, intake remained high over H1 FY23. We were able to adapt intake for SS23 but mainly by reducing width, not depth, which negatively impacted sales over H2 FY23. As we move through FY24 we will benefit from cleaner intake with reduced depth, more accurately reflecting expected stock turn under our new commercial model. Through FY25 we will increasingly benefit from our improving speed and flexibility.

(iii) In-season stock management:

Under our new commercial model, we manage our high-fashion stock in-season, to guarantee that we reach the end of the season with the minimum level of stock unsold, and hence our future operations will not be "polluted" with old stock. This releases cash to invest in new stock, removes detractors from the site, and creates space for newness. This is supported by: improvements to our sourcing, enabling investment into the price and quality of our product; our more disciplined and flexible purchasing (above); and increased fashion-led marketing to drive the right traffic to our site. We will tackle non-performing stock immediately, which leads to a better realised price as discounting closer to the season requires shallower markdown. Ultimately, we focus on new, in-season, full-price product and underscore our value as a reliable source of fashion. This benefits both customers and the partner brands on our platform, creating a virtuous cycle of better relationships with more relevant brands and access to better product. That is precisely what we started to do in SS23. The average age of stock in our October mid-season sale is just 13 weeks, compared to 44 weeks in FY22. This reflects both our progress on clearing through older stock in the last twelve months, as well as our new approach of

clearing high-fashion stock close to the end of the season, thus reducing the amount of product carried forward to SS24.

Obsession with speed

Our obsession with speed is key to unlocking more relevant product across both our own brands and our partner brands. Through our very successful pilot, we have now launched c.500 Test & React options going from design to site in around two weeks. To date, we have seen this stock turning three times quicker than our business-as-usual own brand product despite engaging in no promotional activity, while generating a gross margin several percentage points higher than our own brand average. Promisingly, the Test & React options launched to date are resonating particularly strongly with our youngest customers and getting substantial organic influencer pick-up on social media. At present, Test & React makes up less than 1% of own brand sales but scaling this up to over 10% of own brand by the end of FY24 and c.30% in the medium term will bring more exciting product, have a meaningful impact on our gross margin, and support a cleaner stock profile.

 
                    Test & React 
                     vs. BAU 
 Average cover      c.6 weeks shorter 
                   ------------------ 
 Average discount   15ppts shallower 
  depth 
                   ------------------ 
 Gross basket       >GBP50 higher 
  value 
                   ------------------ 
 Average customer   2.5 years younger 
  age 
                   ------------------ 
 

Our refreshed commercial leadership team will also bring new ways of working with our brand partners, further strengthening relationships with strategic brands, collaborating on product and marketing campaigns, sharing data and insights, and strengthening our back-end processes to accelerate on-boarding of new product and new brands. Our flexible fulfilment model, encompassing Partner Fulfils and AFS, is an important tool, giving access to both additional product and better availability from highly relevant brands. Over the course of FY23, we have scaled our Partner Fulfils offer to 33 brands in six markets and invested in our technology and team to support twice the number of brands in double the number of markets in FY24 as well as launching AFS.

Better sourcing

We will also offer better, more relevant product by improving our sourcing. Simply by sourcing from the right locations, simplifying our processes, and consolidating our supplier base we see a 2 to 3ppt intake margin opportunity over the mid-term, which brings benefits not just in terms of own brand pricing, but also quality, speed, and corporate responsibility standards in our supply chain. In H2 FY23 we have already achieved a c.2 ppt YoY increase in intake margin on ASOS Design Womenswear, where our changes are furthest progressed. This has enabled investment into lower prices, ensuring our own-brand product is competitive both in terms of price and quality.

   2.         Strengthen our relationship with consumers 

ASOS pioneered the use of cultural marketing, content marketing and organic social media to build engagement and relevance with young fashion lovers. In recent years, exacerbated by our stock build-up, ASOS customer experience and engagement has too often centred around discounting or convenience, not fashion and brand storytelling. Over time, ASOS has become overly focused on promotion and performance marketing and we must re-focus on building higher quality customer engagement centred around fashion inspiration and excitement. Customers will love ASOS because we have the best and most relevant product, because we are a destination for style, because we offer a customer experience geared around fashion and excitement and, but not only, because of the convenience of our offer. We must bring that to life in our communication, in our products, and in all our experiences. We will do this by re-igniting our brand, growing appeal amongst our target audience by being present with our fashion message in the earlier stages of the customer journey, and by focusing every interaction with our customers on fashion.

In FY24, we will invest a greater proportion of our marketing budget into re-igniting our brand, making ASOS famous for fashion again. This will include a GBP30m incremental investment focusing on the UK market. We will iterate our plans throughout the year as we understand what resonates most with our target customer. Starting in November, we will:

i) Launch a UK brand marketing campaign, "ASOS Your Way," giving the consumer a richer sense of what ASOS stands for, collaborating with crowd-sourced creators, with 40 million impressions within 12 days.

ii) Run experiential guerrilla marketing activities on a regular pulse including the launch of a London pop-up in November.

iii) Build an always-on influencer programme spanning micro to mega influencers with a combined reach of over 50 million, with the aim of increasing our earned media value (the equivalent value of media a brand receives from creators without paying).

iv) Develop ambassador relationships, working with those ambassadors and collaborators who will authentically strengthen our credentials as a destination for style.

   v)         Significantly enhance our social media presence. 

The benefits of brand marketing are lagging. Within 3-6 months we expect to see greater share of voice on social and increased brand search and over H2, we will start to see increased visits, improved conversion, new active customers, greater order frequency, and a halo effect of stronger returns on performance marketing.

In FY23, customer churn has increased, in part due to actions we have taken to improve the core profitability of the business, including changes designed to improve the behaviours of some of our least profitable customers. Overall, these changes have been successful: profit per order increased by approximately one-third. In some cases, these changes have resulted in us losing very unprofitable customers whose behaviours we are unable to improve, which is an accepted part of the strategy. However, some of our country-level profitability initiatives will have inadvertently caused us to churn higher quality, or 'not-yet-profitable' customers, and our approach in FY24 and beyond must be to better connect with our most fashion-engaged customers, thus improving retention.

Our retention strategy includes elements such as improved customer experience, customer care, and personalisation of customer communications. Premier is also a critical tool for improving the customer experience of our most loyal and most valuable customers, driving an increase in UK average customer value of c.75% compared to the rest of our base. At present, our Premier offer is focused on an enhanced delivery proposition, but there is a significant opportunity to enrich our offer, driving lifetime value and preventing early churn amongst our highest quality customers. We will reinvigorate Premier to increase its appeal based on fashion rather than just convenience, including for example exclusive access to events (including the upcoming London pop-up), early access to promotions, and free gifts including Face & Body samples.

   3.         We will reduce our costs to serve, remove waste and improve our use of data 

While we begin to look again towards growth, we will retain our focus on operational excellence, simplifying all our processes and removing wasted time and cost to reinvest into productive commercial activities. One aspect of this is better prioritisation, ensuring we are allocating resource to projects that will generate a return. As such this FY24 priority is as much about saying 'no' as it is improving the way we operate.

Under our new commercial model, we will operate with less stock going forward. Having already reduced stock levels by c.30% over the last 12 months, we have a further c.16% reduction planned for FY24. In this context, post the year-end, we have reviewed our capacity requirements and started a process to mothball our second UK fulfilment centre in Lichfield in late FY24 following the completion of our automation work. The decision to open and automate Lichfield was taken in 2019 without the ability to break the contract. Mothballing the site provides an annual cost saving of c.GBP20m and provides the flexibility to either sell the facility or re-open it, depending on our capacity needs (see note 17 for further details).

A key focus area for waste in FY24 is returns. While we continue to believe that free returns are a core part of our customer proposition, there are good returns and bad returns. Good returns help acquire new customers, increase basket size, and are an integral part of a profitable customer lifetime. Bad returns are from unprofitable customers, serial returners, or for an unnecessary cause - for example, poor quality or inaccurate sizing. We will constantly strive to eliminate bad returns through: closer scrutiny of returns data to identify high returning products, brands, or materials; corrective action to improve the size, fit, and quality of our products; and AI forecasting to drive better decision-making.

Our culture of operational excellence will be aided by increased access to an improved use of data throughout our organisation and we continue to innovate in this area. We continue to develop our data science and machine learning capabilities which we deploy both across our business areas and to improve the customer experience. In addition, this year we have started to explore how generative AI can support our business - we have early access to Microsoft's AI and Copilot capabilities. Having already rolled out GitHub Copilot to support software engineering, we will soon be piloting 300 business users with Microsoft 365 Copilot which will support our internal productivity. We are also collaborating with Microsoft on developing use cases for generative AI.

Outlook & guidance

Over FY23, we improved our core profitability, delivering c.GBP300m of benefits under the Driving Change agenda; made good progress on improving our stock profile; gained confidence in our operational initiatives including our new commercial model, Test & React, and Partner Fulfils; and laid strong foundations for the years ahead.

Our mid-term priorities are leveraging our strengths: to offer the best & most relevant product; be a destination for style; build a customer journey created around fashion and excitement; and offer competitive convenience. These things will drive our economic model, delivering stronger order economics and delivering better customer lifetime value.

In FY25 we expect to deliver revenue growth and return EBITDA margin to around pre-COVID levels (c.6%). In the medium-term we have confidence in our ability to return to double-digit growth; steadily improve gross margin back towards c.50%; maintain EBITDA sustainably ahead of capex, interest, tax, and leases; reduce capex to 3-4% of sales; and deliver inventory of c.100 days.

FY24 is about taking the necessary action to get us to that path. We expect the annualisation of Driving Change agenda profit initiatives to broadly mitigate the impacts of fixed cost deleverage from our expected revenue decline.

However, our priorities of accelerating towards our new commercial model and strengthening our relationship with consumers require investment in the near term. These investments are twofold:

i) Incremental marketing investment of c.GBP30m (c.1% increase in our operating cost ratio) into re-igniting our brand, making ASOS famous for fashion again.

ii) The discounting of stock carried forward to exit the year with a clean stock position. We may use off-site clearance channels, sacrificing margin to limit cannibalisation.

As such, our expectations for FY24 are:

o Sales decline of 5 to 15%, with P4 FY23 trends (i.e., high double-digit declines) continuing through the first half of FY24 and a return to growth in the final quarter of FY24.

o Adjusted EBITDA positive.

o Stock back to pre-COVID levels (c.GBP600m as previously communicated).

o Capex of c.GBP130m.

o Positive cash generation, reducing our net debt position.

The mothball of our second UK fulfilment centre in Lichfield will result in the remaining GBP45m automation spend, usually classified as capital expenditure, being recorded as an adjusting item in the FY24 income statement.

ASOS has ended FY23 a smaller but more resilient business and remains one of the leading players in online 20-something fashion. While the market has evolved and our model has adapted accordingly, we mustn't lose sight of our core purpose. Our strength in the past came from our relentless focus on bringing the most exciting fashion to consumers with a focus on inspiration and style. By doubling down on that winning formula and evolving our culture to place speed at the heart of everything we do, we can win again.

ASOS will next update the market with a post-close H1 trading update in March 2023, followed by a full H1 results update in April 2023.

José Antonio Ramos Calamonte

Chief Executive Officer

Notes

(1) All numbers subject to rounding throughout this document.

(2) Constant currency is calculated to take account of hedged rate movements on hedged sales and spot rate movements on unhedged sales.

(3) Calculation of metrics, or movements in metrics, on an ex-Russia basis involves the removal of Russia from FY22 performance. This adjustment allows YoY comparisons to be made on a like-for-like basis following the decision to suspend trade in Russia on 2 March 2022. The exception to this is visits, where ASOS has also excluded any visits from Russia in FY23, in addition to FY22.

(4) Like-for-like sales are adjusted to remove the benefit of the additional three days of trading in P4 FY23 (1 June to 3 September 2023) vs. P4 FY22 (1 June to 31 August 2022) and the additional three days of trading in FY23 (1 September 2022 to 3 September 2023) vs. FY22 (1 September 2021 to 31 August 2023). The impact of the additional days is c.3% at group level in P4 FY23 and c.1% in FY23.

(5) The alternative performance measures used by ASOS are explained and defined and reconciled to statutory measures on page 38-40.

(6) Free cash flow is net cash generated from operating activities, less payments to acquire intangible and tangible assets, payment of the principal portion of lease liabilities and net finance expenses.

(7) Profit per order is calculated as variable contribution divided by billed orders.

Financial review

All revenue growth figures are stated at constant currency ('CCY') throughout this document unless otherwise indicated.

 
                                                   Period to 3 September 2023 
                            UK        EU         US       RoW(1)   Total       Adjusting   Total 
                                                                    reported    items(2)    adjusted 
                            GBPm      GBPm       GBPm     GBPm     GBPm        GBPm        GBPm 
-------------------------  --------  ---------  -------  -------  ----------  ----------  ---------- 
 Retail sales(3)            1,494.6    1,127.3    443.6    322.7    3,388.2    (11.5)      3,376.7 
 Revenue from other 
  services(4)               59.8       29.4       57.5     14.6     161.3      -           161.3 
 Total revenue              1,554.4    1,156.7    501.1    337.3    3,549.5    (11.5)      3,538.0 
 Cost of sales                                                     (2,090.5)   115.9       (1,974.6) 
                                                                  ----------  ----------  ---------- 
 Gross profit                                                       1,459.0    104.4       1,563.4 
 Distribution expenses                                             (429.7)     -           (429.7) 
 Administrative expenses                                           (1,279.8)   115.1       (1,164.7) 
 Other income                                                      2.0         -           2.0 
                                                                  ----------  ----------  ---------- 
 Operating loss                                                    (248.5)     219.5       (29.0) 
 Finance income                                                    5.0         -           5.0 
 Finance expense                                                   (53.2)      6.9         (46.3) 
                                                                  ----------  ----------  ---------- 
 Loss before tax                                                   (296.7)     226.4       (70.3) 
                                                                  ----------  ----------  ---------- 
 
 
 
 

Overview

ASOS realised an adjusted loss before tax of GBP70.3m, reflecting a challenging market backdrop characterised by weak consumer sentiment and high inflation; alongside delivery of the Driving Change agenda, which included wide-ranging actions to improve the business's profitability and increased financing costs, including those associated with the refinancing announced in May 2023. Within this, profitability improved substantially in the second half of the year as the initiatives under the Driving Change agenda began to yield benefits and the impact of an increasing returns rate first seen in May 2022 was annualised.

The reported loss before tax of GBP296.7m includes the impact of adjusting items totalling GBP226.4m. These included the stock-write off programme announced at the start of the year (GBP133.2m), property related costs resulting from a reduction in the business's head office and warehouse footprint (GBP60.7m) and consultancy and restructuring costs (GBP31.0m), as well as amortisation relating to the Topshop brands (GBP10.7m) and immaterial items relating to prior years GBP9.2m. The total cash outflow relating to adjusting items in the period was GBP53.4m of which GBP30.8m related to refinancing fees. Further detail on each of these items can be found in note 3 on pages 25-28.

To simplify our processes and make our reporting more efficient we have aligned our internal and external reporting periods. Previously our external reporting was on a twelve-month basis from 1 September to 31 August, whereas internally the weekly nature of our trading is captured in either a 52-week or 53-week year. As such, FY23 ran from 1 September 2022 to 3 September 2023 and therefore included an additional three trading days compared to FY22 (1 September 2021 to 31 August 2022). The impact of this on group sales growth was c.1% for FY23 and c.3% for P4 (1 June 2023 to 3 September 2023), with like-for-like sales growth disclosed in the P4 Trading Statement issued on 26 September 2023. The associated profit and cash flow impact was immaterial. FY24 will be a 52-week period to 1 September 2024.

Revenue

FY23 total sales declined by -11%(5) (-10% on a reported basis) year-on-year ('YoY'), with the decline accelerating to -15% (-12% on a reported basis) in the second half of the year from -7% (-8% reported) in the first half.

Across the year the group's top-line sales performance has been impacted by a combination of market and company-specific factors. From a market perspective, there have been three major headwinds: weak consumer sentiment based on cost-of-living concerns; the apparel market underperforming relative to total retail; and gains in online penetration during the pandemic reverting to a more normalised long-term trajectory as consumers return to stores. All these headwinds have particularly impacted younger consumers.(6)

The second half of the year was also more affected by deliberate profitability actions taken under the Driving Change agenda, which were introduced from January onwards, as well as a trough in new, fashion-led product entering the business during July and August as action taken to reduce intake coincided with usual seasonal factors.

 
 KPIs excluding Russia(7)        Period to 3       Year ended        Change 
                                  September 2023    31 August 2022 
------------------------------  ----------------  ----------------  -------- 
 Active customers(8) (m)         23.3              25.7              (9%) 
 Average basket value(9)         GBP40.33          GBP37.59          7% 
 Average basket value CCY(10)    GBP39.65          GBP37.59          5% 
 Average order frequency(11)     3.59              3.83              (6%) 
 Total shipped orders (m)        83.7              98.3              (15%) 
 Total visits (m)                2,661.3           2,896.2           (8%) 
 Conversion(12)                  3.1%              3.4%              (30bps) 
------------------------------  ----------------  ----------------  -------- 
 

Active customers declined -9% YoY as we continued to churn lower quality customers acquired during the pandemic and employed more discipline in our marketing approach in response to weaker demand. Our profitability actions also included remedial action to improve profitability among loss-making customer segments, driving higher levels of churn. Premier customers declined -11% YoY, reflecting increases to subscription prices and the introduction or increase of minimum order thresholds for free delivery. Average basket value ('ABV') increased by 5%, as pricing increases more than offset the markdown investment used to clear aged inventory. Accordingly, profit per order is over 30% higher(13) .

Both visits and conversion stepped back YoY, as customers made more considered purchases.

Performance by market

UK

 
 UK KPIs             Period to 3 September 2023 
 Total Sales         -12% (-13% LfL) 
                    --------------------------- 
 Visits              -10% 
                    --------------------------- 
 Orders              -17% 
                    --------------------------- 
 Conversion          -40bps 
                    --------------------------- 
 ABV                 +5% 
                    --------------------------- 
 Active Customers    8.1m (-9%) 
                    --------------------------- 
 

Sales in the UK declined by -13% against a difficult consumer backdrop characterised by high inflation and weak sentiment, particularly among the younger ASOS demographic(6) , and deteriorated further in the summer months as challenging weather conditions impacted the wider apparel sector. These factors favoured lower price points and resulted in aggressive discounting in the market as competitors acted to clear excess inventory. The step up in online penetration witnessed during the pandemic continued to reverse, albeit remaining above pre-pandemic levels(14) .

Sales in the period were also impacted by planned profitability actions, including a demand-based approach to deploying marketing spend, pricing changes and fine-tuning the delivery proposition. The price of a Premier subscription was increased in November 2022 but subsequently reversed in May 2023 due to a larger than expected impact on Premier sign-ups. Active customers in the UK were down -9%, also reflecting market conditions as well as measures taken by the business to improve its profitability. These included initiatives designed to minimise the impact of loss-making customers which in some instances resulted in elevated (but intentional) churn, including of certain Premier customer segments.

An increase in average selling price ('ASP') underpinned an ABV increase of 5% to partially offset the impact of fewer orders (-17%), which may also reflect proposition changes designed to encourage our customers to consolidate purchases into fewer, larger orders and hence minimise delivery and returns processing costs. Meanwhile visits (-10%) and conversion (-40bps) reflect more considered purchasing behaviour in a cost-of-living crisis alongside restraint on marketing spend in a weak demand environment.

EU

 
 EU KPIs             Period to 3 September 
                      2023 
 Total Sales         -1% (-4% CCY) 
                    ---------------------- 
 Visits              -6% 
                    ---------------------- 
 Orders              -9% 
                    ---------------------- 
 Conversion          -10bps 
                    ---------------------- 
 ABV                 +9% 
                    ---------------------- 
 ABV (CCY)           +7% 
                    ---------------------- 
 Active Customers    10.1m (-7%) 
                    ---------------------- 
 

Sales in the EU were more resilient than other regions, down -4% CCY as ABV growth (7% CCY) partially offset lower order volumes (-9%). In addition to price increases, ABV benefitted from a stronger performance in AW categories (which are higher ASP) relative to SS. As in the UK, visits and conversion were both back (-6% and -10bps respectively) due to a combination of business specific and market factors.

On a country level, the Netherlands and Southern Europe continued to outperform while Scandinavia and Rest of Europe countries were weaker in response to the more aggressive profitability measures being implemented. Our core European geographies of France and Germany traded below the EU average but broadly in line with the local markets.

US

 
 US KPIs             Period to 3 September 
                      2023 
 Total Sales         -6% (-14% CCY) 
                    ---------------------- 
 Visits              -5% 
                    ---------------------- 
 Orders              -17% 
                    ---------------------- 
 Conversion          -40bps 
                    ---------------------- 
 ABV                 +13% 
                    ---------------------- 
 ABV (CCY)           +4% 
                    ---------------------- 
 Active Customers    2.9m (-12%) 
                    ---------------------- 
 

Total US sales fell by -14% CCY, reflecting challenges in visits (-5%) and conversion (-40bps), with all three metrics deteriorating in response to wide-ranging actions to improve the region's profitability from January onwards. A -17% decline in orders was not offset by the 4% CCY increase in ABV, and active customers were also back -12% reflecting discipline on paid media spend in a weaker demand environment. Wholesale performed well relative to the rest of the segment.

Rest of World

 
 RoW KPIs            Period to 3 September       Period to 3 September 
                      2023 excluding Russia(7)    2023 including Russia 
 Total Sales         -15% (-16% CCY)             -29% (-30% CCY) 
                    --------------------------  ----------------------- 
 Visits              -15%                        -37% 
                    --------------------------  ----------------------- 
 Orders              -23%                        -38% 
                    --------------------------  ----------------------- 
 Conversion          -20bps                      Flat 
                    --------------------------  ----------------------- 
 ABV                 +11%                        +14% 
                    --------------------------  ----------------------- 
 ABV (CCY)           +10%                        +12% 
                    --------------------------  ----------------------- 
 Active Customers    2.2m (-17%)                 2.2m (-35%) 
                    --------------------------  ----------------------- 
 

Rest of World ('RoW') sales fell by -16% CCY and excluding Russia from the base period, reflecting widespread profitability measures outside our core geographies from January onwards. As in other regions, RoW was impacted by price increases and changes to the delivery proposition including price increases and changes to thresholds, resulting in higher ABV (10% CCY) but fewer orders (-23%), with active customers (-17%), visits (-15%) and conversion (-20bps) back as marketing investment was rebased. From a country perspective, Middle East and North Africa ('MENA') performed well while Australia and Asia Pacific ('APAC') were more challenging.

Gross margin

Adjusted gross margin(2) rose 60bps YoY to 44.2% with margin expansion in the second half of the year largely driven by pricing and freight but partially offset by trading activity including higher levels of discounting as the clearance of older inventory was prioritised in a promotional apparel market during the final months of the year.

Reported gross margin was 41.1% (-250bps YoY), with the key difference versus adjusted gross margin being the impact of the stock write-off programme of GBP118.5m(2) announced to facilitate the transition to the new commercial operating model alongside FY22 results.

Operating expenses

 
                                Period to 3 September 2023                Year ended 31 August 2022            Change 
                                                                                                      % of      in GBP 
 GBPm                                                        % of sales                                sales    value 
-----------------------------  ---------------------------  -----------  --------------------------  -------  -------- 
 Distribution costs             (429.7)                      12.1% (15)   (523.7)                     13.3%    18% 
 Warehousing                    (416.4)                      11.8% (15)   (427.0)                     10.8%    2% 
 Marketing                      (195.0)                      5.5% (15)    (223.5)                     5.7%     13% 
 Other operating costs          (400.4)                      11.3% (15)   (380.7)                     9.7%     (5%) 
 Depreciation and 
  amortisation                  (152.9)                      4.3% (15)    (139.1)                     3.5%     (10%) 
-----------------------------  ---------------------------  -----------  --------------------------  -------  -------- 
 Total operating costs (excl. 
  adjusting items)              (1,594.4)                    45.1% (15)   (1,694.0)                   43.0%    6% 
-----------------------------  ---------------------------  -----------  --------------------------  -------  -------- 
 Adjusting items(2)             (115.1)                      3.2%         (53.9)                      1.4%     (114%) 
-----------------------------  ---------------------------  -----------  --------------------------  -------  -------- 
 Total operating costs          (1,709.5)                    48.1%        (1,747.9)                   44.4%    2% 
-----------------------------  ---------------------------  -----------  --------------------------  -------  -------- 
 

Total operating costs excluding adjusting items decreased by -6% YoY, with an 18% reduction in distribution costs and a 13% fall in marketing spend contributing to the improvement. However, the deleverage resulting from reduced volume caused adjusted operating costs as a percentage of sales to increase by 210bps despite strong control of fixed costs.

Distribution costs at 12.1% of sales decreased by 120bps YoY as the impact of stronger basket economics, simplification of our network and successful supplier negotiations offset higher fuel charges. The reduced number of orders in the year (-15%) resulted in lower outbound delivery costs. Cost saving measures under the Driving Change agenda included the simplification of our UK network through the discontinuation of "split orders", fulfilling individual customer orders from one stock pool and negating double carrier costs. Rate negotiations with certain regional suppliers combined with a scaling back of our delivery proposition in some markets reduced distribution cost per parcel. These benefits have more than offset the headwinds from higher fuel charges.

Warehouse costs as a percentage of sales increased by 100bps YoY to 11.8% due to inflation across labour, consumables, and utilities in all fulfilment centres. This increase was weighted to the first half the year (+210bps to 12.4% in H1), as higher stock levels caused inefficiencies in our warehouses at the start of FY23. As inventory reduced in the second half of the year, ancillary and offsite storage locations were closed while changes were made to simplify our UK returns network and drive improvements in pick and pack efficiency. As a result, warehouse costs were 30bps lower YoY in H2.

Marketing costs decreased by 13% YoY and fell 20bps to 5.5% of sales as spend on performance marketing was optimised to deliver the greatest return on investment. This included a more dynamic approach, scaling back marketing spend in response to softer demand and instead investing in discounting to drive sales in a highly promotional market. Spend was optimised within different channels and geographies generating efficiencies, which helped to offset some of the elevated customer acquisition costs experienced in H1.

Other operating costs increased 160bps YoY as a percentage of sales (excluding adjusting items). The annualised payroll cost at the start of the year was much higher than the average for FY22 as the annual pay rise compounded higher entry headcount, in part due to new headcount added across FY22 and a higher level of vacancies in FY22. This was partly mitigated by headcount reduction and tighter control of vacancies through the year, such that by the end of the financial year headcount was on average 11% lower YoY. Contractual increases in third party technology services and overhead costs (including electricity, insurance, rates, and waste management costs) have also contributed to the overall increase, however these have been partly offset by rationalisation across our central cost base as part of the Driving Change agenda.

Across the P&L, and in line with targets that were set earlier in the year, profit improvement and cost mitigation measures have delivered c.GBP300m of benefits in FY23, mitigating headwinds from inflation and an increasing returns rate. These include the pricing increases and sourcing improvements that have impacted gross profit, as well as actions taken to rationalise the supply chain network and reduce overhead costs. Initiatives were also launched to minimise the impact of unprofitable geographies, customers, and brands on our platform, including reversing historical over-investment in our convenience proposition, changing the way we service specific customer segments, and refining our approach to branded promotion. These changes have initially reduced customer numbers and sales, but ultimately support ASOS' ambition to deliver sustainably profitable and cash generative growth in the medium-term.

Depreciation and amortisation costs (excluding adjusting items) as a percentage of sales increased by 80bps YoY. The increase in depreciation and amortisation relates to growth in intangible assets including data services, operations systems and improvements to web and payments platforms.

Interest

ASOS incurred a finance expense (excluding adjusting items) of GBP46.3m compared to GBP23.0m in FY22. This reflected an increase in the level of drawn borrowings, rising interest rates (SONIA at 5.2% at the end of the year from 1.7% at the start) and a higher margin payable post the May 2023 refinancing (see Net Debt, Refinancing and Liquidity section below).

Fees in relation to the covenant waiver, either ineligible for capitalisation or written off once the Revolving Credit Facility ('RCF') was replaced by the new Bantry Bay Capital Limited ('Bantry Bay') refinancing, have been treated as adjusting items.

Finance income of GBP5.0m includes interest earned on deposits at financial institutions. A higher level of return in FY23 compared to the GBP0.9m in FY22 reflected a higher average cash balance and a rising global interest rate environment.

Taxation

The reported effective tax rate is 24.8% based on the reported loss before tax of GBP296.7m. This loss creates a deferred tax asset, recognised at 25%. This is broadly in line with the HY23 effective tax rate of 25%.

Earnings per share

Both basic and diluted loss per share were 213.0p (FY22: basic and diluted loss per share of 30.9p). The higher loss was a function of a higher reported loss before tax of GBP296.7m (FY22: GBP31.9m last year) partially offset by more shares in issue following the equity raise in May 2023. The potentially convertible shares related to both the convertible bond and ASOS' employee share schemes have been excluded from the calculation of diluted loss per share as they are anti-dilutive for the period ended 3 September 2023.

Free cash flow

 
                                                 Period to 3   Year ended 31 
 GBPm                                         September 2023     August 2022 
------------------------------------------  ----------------  -------------- 
 Operating cash flow                                    16.4         (120.4) 
 Purchase of property, plant & equipment 
  and intangible assets                              (177.9)         (182.9) 
 Payment of lease liabilities (principal)             (22.4)          (26.3) 
 Interest received                                       4.5             0.9 
 Interest paid                                        (33.6)          (11.1) 
------------------------------------------  ----------------  -------------- 
 Free cash flow (before financing)                   (213.0)         (339.8) 
 Issuance of equity                                     77.6               - 
 Proceeds from borrowings                              200.0               - 
 Repayment of borrowings                               (1.7)               - 
 Refinancing fees                                     (30.8)               - 
------------------------------------------  ---------------- 
 Cash flow                                              32.1         (339.8) 
------------------------------------------  ----------------  -------------- 
 

There was a free cash outflow(16) (before items relating to financing) of GBP213.0m for the year, including a cash inflow of GBP45.8m in H2 FY23 after a GBP258.8m outflow in the first half of the year.

The inflow from adjusted EBITDA of GBP124.5m and closing inventory being GBP180.4m lower year-on-year (excluding the impact of the one-off stock write-off) was more than offset by adverse working capital movements due to a decrease in trade and other payables. This was largely due to lower intake receipts and operating costs in the second half of the year.

Cash was also used to fund a capital investment of GBP177.9m, including committed spend in relation to the delayed automation projects in Lichfield and Atlanta, and technology projects including in support of the Partner Fulfils expansion. Finally, interest and refinancing costs increased due to the drawdown of the group's previous RCF in September 2022 (the 'Old RCF') and the utilisation of the GBP200m term loan from Bantry Bay ('Term Loan') during the year, with a small offset from interest income as surplus cash was invested as interest rates increased.

Refinancing fees in the year totalled GBP30.8m relating firstly to a waiver of the covenants applicable to the Old RCF in October 2022, then the subsequent amendment and extension of the Old RCF in May 2023 (prior to announcement of the Bantry Bay refinancing). Together with interest payable on the new refinancing of GBP8.0m, consultancy spend of GBP1.2m and the accelerated payment of interest on the Old RCF, the incremental cash cost of refinancing in the year was GBP45.5m.

Net debt, Refinancing and Liquidity

 
                                               Period to 3   Year ended 31 
 GBPm                                       September 2023     August 2022 
----------------------------------------  ----------------  -------------- 
 Convertible bond (fair value of debt 
  component)                                         464.4           451.0 
 Term loan                                           184.8               - 
 Nordstrom loan                                       20.4            22.0 
 Put option liability                                  3.2             2.9 
                                          ----------------  -------------- 
 Borrowings                                          672.8           475.9 
 Cash & cash equivalents                           (353.3)         (323.0) 
 Net debt (excluding lease liabilities)              319.5           152.9 
                                          ----------------  -------------- 
 

Excluding lease liabilities, the business started the year with borrowings of GBP475.9m and net debt of GBP152.9m after cash and cash equivalents of GBP323.0m. On 8 September 2022, GBP250m was drawn under the GBP350m Old RCF. Following the May 2023 refinancing with specialist lender Bantry Bay the Old RCF was repaid in full using the new Term Loan with the balance funded from the proceeds from the issuance of equity. The Term Loan is stated net of directly attributable unamortised refinancing costs.

Cash and undrawn facilities totalled GBP428.3m at year-end (FY22: GBP673.0m) and included cash and cash equivalents of GBP353.3m (FY22: GBP323.0m) and the undrawn new RCF provided as part of the Bantry Bay refinancing of GBP75.0m (FY22: undrawn Old RCF of GBP350.0m).

Sean Glithero

Interim Chief Financial Officer

Notes

(1) Rest of World

(2) The adjusting items and the alternative performance measures used by ASOS are explained and defined in note 3 and on pages 38-40 respectively.

(3) Retail sales are internet sales recorded net of an appropriate deduction for actual and expected returns, relevant vouchers, discounts and sales taxes.

(4) Income from other services comprises of delivery receipt payments, marketing services, commission on partner-fulfilled sales and revenue from wholesale sales.

(5) Total adjusted sales, on a CCY basis, excluding Russia from H1 FY22, and removing the impact of the 3 extra trading days in FY23.

(6) Kantar Total Market | Spend YoY % Change | Online | Total Adultwear | 24 & 52 w/e 20th August 2023 vs LY

(7) Calculation of metrics, or movements in metrics, on an ex-Russia basis involves the removal of Russia from FY22 performance. This adjustment allows YoY comparisons to be made on a like-for-like basis following the decision to suspend trade in Russia on 2 March 2022. The exception to this is visits, where ASOS have also excluded any visits from Russia in FY23, in addition to FY22.

(8) Active customers defined as having shopped in the last 12 financial months.

(9) Average basket value is defined as adjusted net retail sales divided by shipped orders.

(10) Average basket value CCY is calculated as adjusted constant currency net retail sales divided by shipped orders.

(11) Average order frequency is calculated as total shipped orders divided by active customers.

(12) Conversion is calculated as total shipped orders divided by total visits.

(13) Profit per order is calculated as variable contribution divided by billed orders.

(14) BRC-KPMG Retail Sales Monitor for August 2023.

(15) As a percentage of adjusted revenue.

(16) Free cash flow is net cash generated from operating activities, less payments to acquire intangible and tangible assets, payment of the principal portion of lease liabilities and net finance expenses.

Investor and analyst meeting:

The group will be hosting an in-person presentation for analysts at 9.30am at ASOS HQ, Greater London House, NW1 7FB. A live webcast will also be available, and a recording of the presentation will be uploaded to the ASOS investor relations website afterwards.

To access live please dial +44 330 088 5830 and use Meeting ID: 868 8702 0931 and passcode: 474916. A live stream of the event will be available here .

A recording of this webcast will be available on the ASOS Plc investor centre website after the event: https://www.asosplc.com/investor-relations/

For further information:

 
 Investors: 
 Holly Cassell, ASOS Head of Investor Relations  Tel: 020 7756 1000 
 
 
 Media: 
 Jonathan Sibun / Will Palfreyman, Teneo         Tel: 020 7353 4200 
 
 

Background note

ASOS is a destination for fashion-loving 20-somethings around the world, with a purpose to give its customers the confidence to be whoever they want to be. Through its app and mobile/desktop web experience, available in nine languages and in over 200 markets, ASOS customers can shop a curated edit of nearly 50,000 products, sourced from nearly 900 global and local third-party brands alongside a mix of fashion-led own brand labels - including ASOS Design, ASOS Edition, ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, and Miss Selfridge. ASOS aims to give all its customers a truly frictionless experience, with an ever-greater number of different payment methods and hundreds of local deliveries and return options, including Next-Day Delivery and Same-Day Delivery, dispatched from state-of-the-art fulfilment centres in the UK, US, and Germany.

Forward looking statements:

This announcement may include statements that are, or may be deemed to be, "forward-looking statements" (including words such as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances, and actual results may, and often do, differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement. Save as required by applicable law, ASOS plc undertakes no obligation to publicly revise any forward-looking statements in this announcement, whether following any change in its expectations or to reflect events or circumstances after the date of this announcement.

Consolidated Income Statement

For the financial period 1 September 2022 to 3 September 2023

 
                                              1 September 2022 to                  Year ended 31 August 
                                                3 September 2023                           2022 
                                      -----------------------------------  ----------------------------------- 
                                        Adjusted   Adjusting        Total    Adjusted   Adjusting        Total 
                                                       items                                items 
                                                       (Note 
                                                          3) 
                                Note                                                        (Note 
                                                                                               3) 
                                            GBPm        GBPm         GBPm        GBPm        GBPm         GBPm 
                               -----  ----------              ----------- 
 Revenue                                 3,538.0        11.5      3,549.5     3,936.5       -          3,936.5 
 Cost of sales                         (1,974.6)     (115.9)    (2,090.5)   (2,219.0)       -        (2,219.0) 
-----------------------------  -----  ----------  ----------  -----------  ----------  ----------  ----------- 
 Gross profit                            1,563.4     (104.4)      1,459.0     1,717.5       -          1,717.5 
 Distribution expenses                   (429.7)       -          (429.7)     (523.7)       -          (523.7) 
 Administrative expenses               (1,164.7)     (115.1)    (1,279.8)   (1,170.3)      (53.9)    (1,224.2) 
 Other income                                2.0           -          2.0        20.6       -             20.6 
                               ----- 
 Operating (loss)/profit                  (29.0)     (219.5)      (248.5)        44.1      (53.9)        (9.8) 
 Finance income                    5         5.0       -              5.0         0.9       -              0.9 
 Finance expense                   5      (46.3)       (6.9)       (53.2)      (23.0)       -           (23.0) 
                               ----- 
 (Loss)/Profit before 
  tax                                     (70.3)     (226.4)      (296.7)        22.0      (53.9)       (31.9) 
 Income tax credit/(expense)       6        17.4        56.2         73.6       (5.3)         6.4          1.1 
-----------------------------  -----  ----------  ----------  -----------  ----------  ----------  ----------- 
 (Loss)/Profit for 
  the financial period                    (52.9)     (170.2)      (223.1)        16.7      (47.5)       (30.8) 
-----------------------------  -----  ----------  ----------  -----------  ----------  ----------  ----------- 
 
 
 (Loss) per share                                                   pence                                pence 
                                                                per share                            per share 
-----------------------------  -----------------  ----------  -----------  ----------  ----------  ----------- 
 Basic per share                   7                              (213.0)                               (30.9) 
 Diluted per share                 7                              (213.0)                               (30.9) 
-----------------------------  -----  ----------  ----------  -----------  ----------  ----------  ----------- 
 

Consolidated Statement of Comprehensive Income

For the financial period 1 September 2022 to 3 September 2023

 
                                                       1 September 
                                                           2022 to     Year ended 
                                                       3 September      31 August 
                                                              2023           2022 
                                                              GBPm         GBPm 
---------------------------------------------    -----------------  ----------- 
 
 Loss for the financial period                             (223.1)       (30.8) 
-----------------------------------------------  -----------------  ----------- 
 
 Items that will not be reclassified 
  to Group income statement 
 Net fair value (losses)/gains on cash 
  flow hedges                                               (60.1)         51.2 
 Tax on items that will not be reclassified                    9.7       (13.4) 
-----------------------------------------------  -----------------  ----------- 
                                                            (50.4)         37.8 
 
 Items that may be subsequently reclassified 
  to Group income statement 
 Net translation movements offset in 
  reserves                                                   (0.3)          0.3 
 Net fair value gains/(losses) on cash 
  flow hedges                                                 30.5       (25.9) 
 Fair value movements reclassified from 
  cash flow hedge reserve to Group income 
  statement                                                    1.7       (15.6) 
 Tax on items that may be reclassified                       (7.7)          9.5 
-----------------------------------------------  -----------------  ----------- 
                                                              24.2       (31.7) 
  ---------------------------------------------  -----------------  ----------- 
 Other comprehensive (loss)/income 
  for the period                                            (26.2)          6.1 
-----------------------------------------------  -----------------  ----------- 
 Total comprehensive loss for the period 
  attributable to owners of the parent 
  company                                                  (249.3)       (24.7) 
-----------------------------------------------      -------------  ----------- 
 
 

Consolidated Balance Sheet

As at 3 September 2023

 
                                     Note   3 September 2023   31 August 
                                                                    2022 
----------------------------------  ----- 
                                                        GBPm        GBPm 
----------------------------------  -----  -----------------  ---------- 
 Non-current assets 
 Goodwill and other intangible 
  assets                                8              700.5       683.9 
 Property, plant and equipment          9              362.6       351.7 
 Right-of-use assets                   10              295.2       380.3 
 Investment Properties                                  10.9           - 
 Derivative financial assets                             4.1        27.0 
 Deferred tax assets                                    17.8           - 
----------------------------------  -----  ----------------- 
                                                     1,391.1     1,442.9 
----------------------------------  -----  -----------------  ---------- 
 Current assets 
 Inventories                                           768.0     1,078.4 
 Trade and other receivables                            81.4        88.2 
 Derivative financial assets                            22.4        41.4 
 Cash and cash equivalents             11              353.3       323.0 
 Current tax assets                                      9.4        23.0 
----------------------------------  -----  ----------------- 
                                                     1,234.5     1,554.0 
----------------------------------  -----  -----------------  ---------- 
 Current liabilities 
 Trade and other payables              12            (680.4)     (993.3) 
 Borrowings                            13              (1.5)       (1.4) 
 Lease liabilities                     10             (25.3)      (24.3) 
 Derivative financial liabilities                      (6.0)      (21.0) 
 Provisions                            14              (2.0)           - 
                                                     (715.2)   (1,040.0) 
----------------------------------  -----  -----------------  ---------- 
 Net current assets                                    519.3       514.0 
----------------------------------  -----  -----------------  ---------- 
 
 Non-current liabilities 
 Borrowings                            13            (671.3)     (474.5) 
 Lease liabilities                     10            (303.7)     (355.8) 
 Deferred tax liabilities                                  -      (58.2) 
 Derivative financial liabilities                      (0.5)      (11.6) 
 Provisions                            14             (68.2)      (41.9) 
                                                   (1,043.7)     (942.0) 
----------------------------------  -----  -----------------  ---------- 
 Net assets                                            866.7     1,014.9 
----------------------------------  -----  -----------------  ---------- 
 Equity attributable to 
  owners of the parent 
 Called up share capital                                 4.2         3.5 
 Share premium                                         322.6       245.7 
 Other reserves                                         73.1        82.4 
 Retained earnings                                     466.8       683.3 
 Total equity                                          866.7     1,014.9 
----------------------------------  -----  -----------------  ---------- 
 

Consolidated Statement of Changes in Equity

For the financial period 1 September 2022 to 3 September 2023

 
                                             Called      Share       Other    Retained     Total 
                                           up share    premium    reserves    earnings    equity 
                                            capital 
                                               GBPm       GBPm        GBPm        GBPm      GBPm 
 At 1 September 2022                            3.5      245.7        82.4       683.3   1,014.9 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Loss for the period                              -          -           -     (223.1)   (223.1) 
 Other comprehensive loss for 
  the period                                      -          -      (26.2)           -    (26.2) 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Total comprehensive loss 
  for the period                                  -          -      (26.2)     (223.1)   (249.3) 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Cash flow hedges gains and 
  losses transferred to non-financial 
  assets                                          -          -        16.9       -          16.9 
 Share issue                                    0.7       76.9       -           -          77.6 
 Share-based payments charge                      -          -       -             6.4       6.4 
 Tax relating to share option 
  scheme                                          -          -       -             0.2       0.2 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Balance as at 3 September 
  2023                                          4.2      322.6        73.1       466.8     866.7 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 
 At 1 September 2021                            3.5      245.7        70.8       714.0   1,034.0 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Loss for the year                                -          -       -          (30.8)    (30.8) 
 Other comprehensive income 
  for the year                                    -          -         6.1       -           6.1 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Total comprehensive income/(loss) 
  for the year                                    -          -         6.1      (30.8)    (24.7) 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Cash flow hedges gains and 
  losses transferred to non-financial 
  assets                                          -          -         5.5       -           5.5 
 Share-based payments charge                      -          -       -             0.8       0.8 
 Tax relating to share option 
  scheme                                          -          -       -           (0.7)     (0.7) 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 Balance as at 31 August 2022                   3.5      245.7        82.4       683.3   1,014.9 
---------------------------------------  ----------  ---------  ----------  ----------  -------- 
 

Retained earnings includes the share-based payments reserve, and employee benefit trust reserve.

Consolidated Cash Flow Statement

For the financial period 1 September 2022 to 3 September 2023

 
                                                         1 September      Year to 
                                                 2022 to 3 September    31 August 
                                                                2023         2022 
                                                                GBPm         GBPm 
-------------------------------------------   ----------------------  ----------- 
 Operating loss                                              (248.5)        (9.8) 
 Adjusted for: 
 Depreciation of property, plant and 
  equipment, right-of-use assets and 
  investment property                                           67.8         61.0 
 Amortisation of other intangible assets                       104.7         88.8 
 Impairment charges on non-financial 
  assets                                                        32.1         19.2 
 Share-based payments charge                                     5.2          0.6 
 Other non-cash items                                            1.8        (4.9) 
 Settlement of contingent consideration 
  in relation to employee benefits                                 -        (6.0) 
 Decrease/(increase) in inventories                            310.4      (258.7) 
 Decrease/(increase) in trade and other 
  receivables                                                   12.7       (34.2) 
 (Decrease)/increase in trade and other 
  payables                                                   (304.9)         21.5 
 Increase/(decrease) in provisions                              16.8        (1.3) 
--------------------------------------------  ----------------------  ----------- 
 Cash used in operating activities                             (1.9)      (123.8) 
 Net income tax received                                        18.3          3.4 
--------------------------------------------  ----------------------  ----------- 
 Net cash generated from/(used in) 
  operating activities                                          16.4      (120.4) 
 
 Investing activities 
 Purchase of other intangible assets                         (136.2)      (109.2) 
 Purchase of property, plant and equipment                    (41.7)       (73.7) 
 Interest received                                               4.5          0.9 
--------------------------------------------  ----------------------  ----------- 
 Net cash used in investing activities                       (173.4)      (182.0) 
 
 Financing activities 
 Proceeds from issue of ordinary shares                         77.6            - 
 Proceeds from borrowings                                      200.0            - 
 Drawdown of revolving credit facility                         250.0            - 
 Repayment of borrowings                                     (251.7)            - 
 Refinancing fees                                             (30.8)            - 
 Repayment of principal portion of 
  lease liabilities                                           (22.4)       (26.3) 
 Interest paid                                                (33.6)       (11.1) 
--------------------------------------------  ----------------------  ----------- 
 Net cash generated from/(used in) 
  financing activities                                         189.1       (37.4) 
--------------------------------------------  ----------------------  ----------- 
 
 Net increase/(decrease) in cash and 
  cash equivalents                                              32.1      (339.8) 
--------------------------------------------  ----------------------  ----------- 
 
 Opening cash and cash equivalents                             323.0        662.7 
 Effect of exchange rates on cash and 
  cash equivalents                                             (1.8)          0.1 
--------------------------------------------  ----------------------  ----------- 
 Closing cash and cash equivalents                             353.3        323.0 
--------------------------------------------  ----------------------  ----------- 
 

1 GENERAL INFORMATION

The financial information contained within this preliminary announcement for the periods from 1 September 2022 to 3 September 2023 and 1 September 2021 to 31 August 2022 do not comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year to 31 August 2022 have been filed with the Registrar of Companies and those for the period to 3 September 2023 will be filed following the Company's annual general meeting. The auditors have reported on the 2023 accounts: their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

ASOS Plc ('the Company') and its subsidiaries (together, 'the Group') is a global fashion retailer. The Group sells products across the world and has websites targeting countries that include the UK, US, Australia, France, Germany, Spain, Italy, Sweden, the Netherlands, Denmark and Poland. The Company is a public limited company whose shares are publicly traded on the London Stock Exchange. The Company is incorporated and domiciled in the UK and the address of its registered office is Greater London House, Hampstead Road, London NW1 7FB.

The financial period represents the period from 1 September 2022 to 3 September 2023 (prior financial year: the year ended 31 August 2022). This does not constitute a change in accounting reference date. The Group will present results on a 52 or 53 week period in future periods to align with internal reporting timelines. The financial information comprises the results of the Company and its subsidiaries.

2 SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS) and with the requirements of the Companies Act 2006 and the Listing rules as applicable to companies reporting under those standards.

The financial statements have been prepared under the historical cost basis of accounting, excluding derivative financial instruments which are held at fair value. The financial statements are presented in sterling and all values are rounded to the nearest million pounds except where otherwise indicated.

2.2 Changes in presentation

Other comprehensive income

Other comprehensive income is now disclosed as a separate statement from the consolidated income statement.

Consolidated balance sheet

The presentation of the consolidated balance sheet has been updated as follows:

   --      Goodwill and other intangible assets are now disclosed as one line item 
   --      Right-of-use assets are now presented separately from property, plant and equipment 

-- The employee benefit trust reserve which was previously disclosed separately is now reported within retained earnings

-- The cash flow hedge reserve, convertible bond reserve and translation reserve are grouped and presented as Other Reserves in the consolidated balance sheet, and within the consolidated statement of changes in equity

The comparatives have also been updated to reflect these changes.

Consolidated cash flow statement

The presentation of the consolidated cashflow statement has been updated so that movements in provisions are shown separately. These were previously included within movements in trade and other payables. Comparatives have been updated.

2.3 Going concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for a period of at least 12 months from the date of approval of the financial statements, and therefore continue to adopt the going concern basis in preparing the financial statements. To support this assessment, detailed cash flow forecasts were prepared for the 18-month period to February 2025.

In assessing the Group's going concern position, the Directors have considered the Group's detailed budgeting and forecasting process which reflects the Group's financial performance, position and cash flows over the going concern period (the base case). These cash flow forecasts represent the Directors' best estimate of trading performance and cost implications in the market based on current agreements, market experience and consumer demand expectations. In conjunction with this, the Directors considered the Group's business activities and principal risks, reviewing the Group's cash flows, liquidity positions and borrowing facilities for the going concern period.

The review included the continued availability of existing borrowings, principally related to the new Bantry Bay debt facility and issued convertible bonds, details of which can be found in Note 13. At 3 September 2023, the Group was fully drawn on the GBP200m term loan with Bantry Bay, and had an undrawn Revolving credit facility ("RCF") of GBP75m, with a maturity of April 2026, along with GBP500m convertible bonds with a maturity of April 2026. The only covenant the Group is subject to under the debt facilities is a minimum liquidity covenant of GBP90m, based on available cash and cash equivalents and amounts undrawn under the RCF, which is the primary test within the going concern assessment.

Key assumptions- forecasting business cashflows

The assessment of the Group's going concern position required significant management judgement, including in determining the key assumptions that have the greatest impact on forecasts of future business performance and the range of reasonably possible outcomes of those assumptions. The economic environment has remained challenging throughout FY23 with cost of living pressures continuing to impact customer spending and sentiment. It is not known how long this will continue to directly impact the business and consumer behaviour, nor the impact that a changed economy will have on consumers over the going concern period. For the purposes of the Group's going concern assessment, the Directors have therefore made assumptions on the likely future cash flows in the uncertain macro environment. The assumptions considered include the continued transition to the Group's new operating model and subsequent working capital improvements, as well as a marginal improvement in the macro trading environment, with the online fashion market assumed to return to growth on an aggregated basis across the Group's key territories. The base case assumes the market backdrop within the initial going concern period is to remain challenging, resulting in assumed year-on-year Group sales declines in FY24 of between (5)% and (15)%, returning to year-on-year double digit sales growth and subsequent market share gains by the end of the assessment period. The base case also assumes modest year-on-year improvements in adjusted gross margin during FY24, with up to c.300bps growth vs FY23 towards the end of the assessment period.

Aligned to the Group's principal risks, the Directors have also considered various severe but plausible downside scenarios against the base case, comprising of the following assumptions:

   --      Sales growth reduction; 
   --      Gross margin reduction; 
   --      Potential working capital cash impacts. 

The downside scenarios are considered and mapped by half, with the greater degree of assumption-based improvements and subsequent volatility in the outer periods commanding more severe downside sensitivities. Sensitivities mapped against the base case within the downside case are highlighted below:

 
 Downside vs base case               H1 FY24    H2 FY24    H1 FY25 
 Sales                                 (5)%      (10)%      (15)% 
                                    ---------  ---------  --------- 
 Gross Margin                        (140)bps   (250)bps   (220)bps 
                                    ---------  ---------  --------- 
 Working Capital impact (average)    GBP(76)m   GBP(84)m   GBP(73)m 
                                    ---------  ---------  --------- 
 

Should the Group see such significant events unfold it has several mitigating actions it can implement to manage its liquidity risk, such as deferring capital investment spend, deferring or reducing stock intake to match the sales reduction, and implementing further cost management to maintain a sufficient level of liquidity headroom during the going concern period. The combined impact of the above downside scenarios and mitigations does not trigger a minimum liquidity breach at any point in the going concern period, and offers suitable headroom above the threshold referred to in the Bantry Bay debt facility.

Reverse stress tests have also been performed on both the Group's revenue and gross margin. The tests under consideration hold all metrics in line with the downside case highlighted above, analysing how far the stress metric would need to decline against the base case to cause a liquidity event. Such results would have to see a minimum of c.30% decline in sales over the base case, or a decline in gross margin from the base case of c.650bps across the entire assessment period. Both are considered remote based on results of previous significant economic events and recent trading performance, particularly on the basis that the Group is annualising the challenging market conditions experienced in FY23.

In assessing the group's ability to continue as a going concern the directors have considered climate change risks. Transitional risk outcomes are expected to manifest in the short to medium term (2025 to 2030). As the going concern assessment covers the 18 months to February 2025 (i.e. the very beginning of the TCFD transitional risk period) it is not considered that climate-related risks result in any material uncertainties affecting the Group's ability to continue as a going concern.

Based on the above, the Directors have concluded that, on the basis of there being liquidity headroom under both the base case and downside scenarios, and the consideration that the reverse stress test scenario is remote, it is appropriate to adopt the going concern basis of accounting in the preparation of the Group's annual financial statements, with no material uncertainty to disclose.

2.5 Amendments to published standards

The Group has considered the following amendments to published standards that are effective for the Group for the financial period beginning 1 September 2022 and concluded that they are either not relevant to the Group or that they do not have a significant impact on the Group's financial statements other than disclosures.

   --      Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) 
   --      Annual Improvements to IFRS Standards 2018-2020 
   --      Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) 
   --      Reference to the Conceptual Framework (Amendments to IFRS 3) 

The following standards and revisions will be effective for future periods:

   --      IFRS 17 'Insurance Contracts' 

-- Amendments to IAS 1 'Presentation of Financial Statements' and IFRS Practice Statement 2 'Making Materiality Judgements' on the disclosure of accounting policies

-- Amendments to IAS 1 'Presentation of Financial Statements' on the classification of liabilities as current or non-current

-- Amendments to IAS 1 'Presentation of Financial Statements' on non-current liabilities with covenants

-- Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' on the definition of accounting estimates

-- Amendments to IAS 12 'Income Taxes' on Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

   --      Amendments to IFRS 16 'Leases' on Lease Liability in a Sale and Leaseback 

-- Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28 'Investments in Associates and Joint Ventures' on the sale or contribution of assets between an investor and its associate or joint venture

The Group has considered the impact of the remaining above standards and revisions and have concluded that they will not have a significant impact on the Group's financial statements.

2.6 Alternative performance measures (APMs)

In the reporting of financial information, the Directors use various APMs. These APMs should be considered in addition to, and are not intended to be a substitute for, IFRS measurements. As they are not defined by International Financial Reporting Standards, they may not be directly comparable with other companies' APMs.

The Directors believe that these APMs provide additional useful information for understanding the financial performance and health of the Group. They are also used to enhance the comparability of information between reporting periods (such as adjusted profit) by adjusting for non- recurring or uncontrollable factors which affect IFRS measures, to aid users in understanding the Group's performance.

Consequently, APMs are used by the Directors and management for performance analysis, planning, reporting and incentive setting purposes. The APMs that the Group has focused on in the period are defined and reconciled on pages 38 to 40. All of the APMs relate to the current period's results and comparative periods.

3 ADJUSTED PROFIT BEFORE TAX

In order to provide shareholders with additional insight into the year-on-year performance of the business, an adjusted measure of profit is provided to supplement the reported IFRS numbers, and reflects how the business measures performance internally. Adjusted items are those which are significant either by virtue of their size and/or nature, the inclusion of which could distort comparability between periods. The assessment is made both on an individual basis and, if of a similar type, in aggregate.

The consolidated income statement is presented in a columnar format to enable users of the financial statements to see the Group's performance before adjusting items, the adjusting items, and the statutory total on a line-by-line basis. An analysis of the adjusting items included in the consolidated income statement, together with the impact of these items on the consolidated cash flow statement, is disclosed below.

 
 1 September 2022 to               Revenue        Cost   Administrative     Finance          Total     Tax     Total 
  3 September 2023                            of sales         expenses    expenses    adjustments 
                                                                                            before 
                                                                                               tax 
                                      GBPm        GBPm             GBPm        GBPm           GBPm    GBPm      GBPm 
--------------------------------  --------  ----------  ---------------  ----------                 ------  -------- 
 Driving change agenda 
  Commercial operating 
   model change                       11.5     (130.0)           (14.7)           -        (133.2)    33.2   (100.0) 
  Property-related costs                 -           -           (60.2)       (0.5)         (60.7)    15.2    (45.5) 
  Other strategic initiatives            -           -           (24.6)       (6.4)         (31.0)     7.4    (23.6) 
 Amortisation of acquisition 
  intangibles                            -           -           (10.7)           -         (10.7)     2.7     (8.0) 
 Other items                             -        14.1            (4.9)           -            9.2   (2.3)       6.9 
                                      11.5     (115.9)          (115.1)       (6.9)        (226.4)    56.2   (170.2) 
--------------------------------  --------  ----------  ---------------  ----------                         -------- 
 
 Year to 31 August 2022            Revenue        Cost   Administrative     Finance          Total     Tax     Total 
                                              of sales         expenses    expenses    adjustments 
                                                                                            before 
                                                                                               tax 
                                      GBPm        GBPm             GBPm        GBPm           GBPm    GBPm      GBPm 
--------------------------------  --------  ----------  ---------------  ----------                 ------  -------- 
 
 ASOS Reimagined                         -           -           (25.4)           -         (25.4)     4.8    (20.6) 
 Main Market transition 
  costs                                  -           -            (5.7)           -          (5.7)   (1.1)     (6.8) 
 Impairment of Leavesden 
  assets                                 -           -           (18.5)           -         (18.5)     2.3    (16.2) 
 Employee and other liabilities 
  relating to acquisition 
  of Arcadia brands                      -           -              6.4           -            6.4   (1.2)       5.2 
 Amortisation of acquired 
  intangible assets                      -           -           (10.7)           -         (10.7)     1.6     (9.1) 
--------------------------------  --------  ----------  ---------------  ---------- 
                                         -           -           (53.9)           -         (53.9)     6.4    (47.5) 
--------------------------------  --------  ----------  ---------------  ----------                         -------- 
 

Driving change agenda

In October 2022, ASOS' new CEO delivered an assessment of the business's strengths and weaknesses and launched the Driving Change agenda to return ASOS to profitability and cash generation. This strategy centred around four pillars:

a. A renewed commercial model: A new approach to buying, merchandising, managing and clearing stock designed to increase flexibility and improve stock turn, increasing full price sales and generating cash.

b. Stronger order economics and a lighter cost profile: Actions to improve order profitability in all markets while reducing costs in all parts of the business.

c. Robust, flexible balance sheet: Ensuring sufficient flexibility in the Group's balance sheet to successfully execute its strategy while aligning investment with capacity requirements to ensure a more efficient allocation of capital.

d. Enabled by a reinforced leadership team and refreshed culture: Reinforcing the Senior Leadership team with strategic hires while embedding a more innovative culture at all levels.

Various items of income and expenditure have been incurred during the period in relation to this, as outlined below.

Commercial operating model

A key focus for ASOS in FY23 has been the introduction of the new commercial operating model which was approved by the Board during the current financial period. The new model involves a more disciplined approach to intake, increased speed to market and clearing product more quickly to reduce the Group's inventory requirement, increase full price sales and hence gross margin, and improve customer engagement. To unlock these benefits, the Group must also clear old stock acquired under its previous ways of working. As such and in addition to clearance via its own platform, ASOS is utilising offsite clearance routes to support its transition to the new model.

To transition to the new model, a reshaping of the inventory portfolio has been required, and as a result additional costs have been recognised totalling GBP133.2m. This comprises losses on stock cleared during the period, net of income received of GBP11.5m, as well as provisions for stock (either held as at FY22 or committed to purchase as at FY22) that will be sold through alternative clearance channels (i.e. not via the ASOS website).

Extraction and relevant holding costs totalling GBP14.7m have also been incurred.

Property related costs

During the period it was agreed to vacate a number of Group-occupied sites, including office and warehouse space. As a result, costs of GBP60.7m have been incurred, comprising the following:

 
 1 September 2022 to 3 September 2023                 GBPm 
-------------------------------------------------  ------- 
 Impairment of property, plant and equipment (a)     (5.6) 
 Impairment of intangible assets (a)                 (1.7) 
 Impairment of right of use assets (a)              (20.0) 
 Impairment of investment property (a)               (1.3) 
 Accelerated depreciation (b)                        (7.6) 
 Exit provisions (c)                                (18.3) 
 Other closure costs (d)                             (6.2) 
-------------------------------------------------  ------- 
                                                    (60.7) 
-------------------------------------------------  ------- 
 

a) Impairment of assets for sites vacated during the financial period. The related assets have been written off in full.

b) The remaining useful economic lives of corresponding sites have been reassessed to align with closure dates, resulting in an acceleration in depreciation of these assets. The existing depreciation of these assets (depreciation that would have been recognised absent of a closure decision) is recognised within adjusted profit, whereas accelerated depreciation above this is recognised outside of adjusted profit.

c) Exit provisions relate to onerous contract costs on leased sites that have been identified for closure. Upon initial recognition of exit provisions, management uses its best estimates of the relevant costs to be incurred as well as expected closure dates. This excludes business rates on leased property which are recognised in the period they are incurred. Whilst the properties remain vacant, ongoing expenses relating to lease interest, onerous provision unwinds and business rates will be reported outside adjusted profit given they do not relate to operational sites of the Group.

   d)   Relates to negotiated exit costs to vacate certain leased sites ahead of the lease end date. 

Other strategic initiatives

Other priorities for FY23 communicated at the FY22 results included: (i) stronger order economics and a lighter cost profile, (ii) a robust, flexible balance sheet, and, (iii) a reinforced leadership team and refreshed culture. ASOS has progressed with each of these priorities during the period, with costs of GBP31.0m incurred and excluded from adjusted profit. These predominantly relate to external consultancy costs to support the launch of the programme and the identification of initiatives (GBP8.9m), severance costs (GBP7.7m), costs incurred associated with the revolving credit facility covenant waiver and subsequent refinancing during the year (GBP8.1m - refer to Note 13 for more detail) and other business restructuring costs (GBP6.3m). The Driving Change agenda has replaced the Group's ASOS Reimagined programme that commenced in the prior year.

Costs incurred last year in relation to ASOS Reimagined totalled GBP25.4m, bringing cumulative change agenda costs incurred to date to GBP250.3m (including the commercial model change and property initiatives), of which GBP63.0m is cash.

Amortisation of acquired intangible assets

Amortisation of acquired intangible assets is adjusted for as acquisitions are outside business-as-usual operations for ASOS. These assets would not normally be recognised outside of a business combination, therefore the associated amortisation is adjusted.

Other items

During the period, the Group corrected in-aggregate and individually immaterial items relating to prior years totalling GBP9.2m.

Prior year adjusting items

Items recognised outside adjusted profit in the prior year relate to:

-- ASOS Reimagined - A multi-year programme to enable the business to accelerate delivery of the strategy and medium-term plan set out at the Capital Markets Day held on 10 November 2021. This has subsequently been replaced by the Group's Driving Change agenda.

-- Main Market transition costs - ASOS' transition to the Main Market of the London Stock Exchange, which was completed on 22 February 2022.

-- Impairment of Leavesden assets - A non-cash impairment charge relating to the right-of-use assets and associated fixtures and fittings at part of ASOS' Leavesden office.

-- Employee and other liabilities relating to Arcadia acquisition - The release of a contingent liability relating to employee and other costs, which was originally recognised as part of the Arcadia acquisition in February 2021.

Classification as adjusting items

Given a number of the costs incurred as part of the above programmes facilitate future ongoing cost savings, it was considered whether it was appropriate to report these costs within adjusted profit/(loss). Whilst they arise from changes in the Group's underlying operations, they can be separately identified, are significant in size/nature and their inclusion within adjusted profit/(loss) does not facilitate meaningful comparison between financial periods. Furthermore, the costs incurred arise as a result of implementing changes for the future to evolve and reshape the business and are therefore not reflective of ordinary, in-year trading activity, and for areas being closed or restructured, these operations no longer relate to the Group's trading operations. Exclusion from adjusted profit/(loss) is therefore considered appropriate.

Cash flow impact of adjusting items

The total cash flow impact of adjusting items is as follows:

 
                                                1 September     Year to 31 
                                                  2022 to 3    August 2022 
                                                  September 
                                                       2023 
--------------------------------------------- 
                                                       GBPm           GBPm 
---------------------------------------------  ------------  ------------- 
 Commercial operating model change                      3.5              - 
 Other strategic initiatives (including ASOS 
  Reimagined)                                        (56.9)         (12.5) 
 Main Market transition costs                             -          (5.7) 
 Total adjusting items within cash flow              (53.4)         (18.2) 
---------------------------------------------  ------------  ------------- 
 

Other strategic initiatives includes GBP30.8m fees paid in relation to refinancing included within cash flows from financing activities, as detailed in Note 13.

An additional property initiative was approved after the balance sheet date for which costs are expected next year that will be excluded from adjusted profit. Refer to Note 17 for additional information.

4 SEGMENTAL ANALYSIS

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reporting on components of the Group that are regularly reviewed by the chief operating decision-maker to allocate resources to the segments and to assess their performance.

The Chief Operating Decision Maker has been determined to be the Management Committee (renamed from the Executive Committee as part of the Group's Driving Change agenda). It is the Management Committee that reviews the Group's internal reporting in order to assess performance and allocate resources across the business. In doing so, the Management Committee reviews performance across the Group via a number of sources, comprising regular monthly management accounts, and ad hoc analysis that provides deep dives into different areas, including territory, brands and revenue streams.

In determining the Group's operating segments, management has considered the level of information which is regularly reviewed by the Management Committee. Information regularly reviewed by the Management Committee is at a consolidated Group level only, with some disaggregated revenue information and associated metrics provided for the geographical territories of the UK, the US, Europe and the Rest of the World. However, decisions on resource allocation are not made based on this information. Such decisions are made on ad hoc analysis, separately provided to the Management Committee, and does not constitute information that is either regularly provided to, nor reviewed by, the Management Committee. As a result, it has been concluded that the Group has only one operating segment (the Group level).

Information by Geographical territory is included below in line with the entity-wide disclosure requirements of IFRS 8 "Operating Segments".

 
                                     1 September 2022 to 3 September 2023 
                                    UK        EU      US        Rest       Total 
                                                            of world 
---------------------------- 
                                  GBPm      GBPm    GBPm        GBPm        GBPm 
----------------------------  --------  --------  ------  ----------  ---------- 
 Retail sales                  1,494.6   1,127.3   443.6       322.7     3,388.2 
 Income from other services       59.8      29.4    57.5        14.6       161.3 
 Total revenue                 1,554.4   1,156.7   501.1       337.3     3,549.5 
 Cost of sales                                                         (2,090.5) 
 Gross profit                                                            1,459.0 
 Distribution expenses                                                   (429.7) 
 Administrative expenses                                               (1,279.8) 
 Other income                                                                2.0 
 Operating loss                                                          (248.5) 
 Finance income                                                              5.0 
 Finance expense                                                          (53.2) 
 Loss before tax                                                         (296.7) 
----------------------------  --------  --------  ------  ----------  ---------- 
 
 Non-current assets(1)           994.1     177.9   162.0           -     1,334.0 
----------------------------  --------  --------  ------  ----------  ---------- 
 
                                            Year to 31 August 2022 
                                    UK        EU      US        Rest       Total 
                                                            of world 
---------------------------- 
                                  GBPm      GBPm    GBPm        GBPm        GBPm 
----------------------------  --------  --------  ------  ----------  ---------- 
 Retail sales                  1,703.3   1,142.6   472.7       454.0     3,772.6 
 Income from other services       59.5      27.4    58.7        18.3       163.9 
 Total revenue                 1,762.8   1,170.0   531.4       472.3     3,936.5 
 Cost of sales                                                         (2,219.0) 
 Gross profit                                                            1,717.5 
 Distribution expenses                                                   (523.7) 
 Administrative expenses                                               (1,224.2) 
 Other Income                                                               20.6 
 Operating loss                                                            (9.8) 
 Finance income                                                              0.9 
 Finance expense                                                          (23.0) 
 Loss before tax                                                          (31.9) 
----------------------------  --------  --------  ------  ----------  ---------- 
 
 Non-current assets(1)         1,006.7     188.8   185.2           -     1,380.7 
----------------------------  --------  --------  ------  ----------  ---------- 
 

(1) Non-current assets above exclude goodwill, derivative financial assets and deferred tax assets.

The above presentation is consistent with the analysis provided to the chief operating decision maker within the monthly management accounts.

Due to the nature of its activities, the Group is not reliant on any individual major customers.

5 FINANCE INCOME AND EXPENSES

 
                                      1 September 2022 to   Year ended 
                                         3 September 2023    31 August 
                                                                  2022 
                                                     GBPm         GBPm 
----------------------------------  ---------------------  ----------- 
 
 Finance income                                       5.0          0.9 
-----------------------------------  --------------------  ----------- 
 
 Interest on convertible bond and 
  other borrowings                                 (50.8)       (19.5) 
 IFRS 16 lease interest                             (5.6)        (5.4) 
 Provisions - unwind of discount                    (1.6)        (0.2) 
 Interest capitalised                                 4.8          2.1 
-----------------------------------  --------------------  ----------- 
 Total finance expense                             (53.2)       (23.0) 
-----------------------------------  --------------------  ----------- 
 

6 TAXATION

 
                                                       1 September 2022     Year to 31 
                                                                     to    August 2023 
                                                       3 September 2023 
--------------------------------------------------- 
                                                                   GBPm           GBPm 
---------------------------------------------------  ------------------  ------------- 
 Current year UK tax                                          -                 (11.8) 
 Current year overseas tax                                          3.4            0.9 
 Adjustment in respect of prior year corporation 
  tax                                                             (4.1)          (3.0) 
 Total current tax credit                                         (0.7)         (13.9) 
 
 Origination and reversal of temporary differences               (73.2)           11.2 
 Adjustment from changes in tax rates                             (0.1)            0.2 
 Adjustment in respect of prior years                               0.4            1.4 
 Total deferred tax (credit)/charge                              (72.9)           12.8 
 Total income tax credit in income statement                     (73.6)          (1.1) 
---------------------------------------------------  ------------------  ------------- 
 Analysed as: 
   Tax on adjusted profit                                        (17.4)            5.3 
   Tax on items excluded from adjusted profit                    (56.2)          (6.4) 
 Total income tax credit in income statement                     (73.6)          (1.1) 
---------------------------------------------------  ------------------  ------------- 
 Effective tax rate                                               24.8%           3.4% 
---------------------------------------------------  ------------------  ------------- 
 

7 EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent company ASOS Plc by the weighted average number of ordinary shares in issue during the period. Own shares held by the Employee Benefit Trust and Link Trust are excluded from the weighted average number of ordinary shares.

Diluted earnings per share is calculated by dividing the profit attributable to the owners of the parent company by the weighted average number of ordinary shares in issue during the period, excluding own shares held, adjusted for the effects of potentially dilutive ordinary shares. The dilutive impact is calculated as the weighted average of all potentially dilutive ordinary shares. These represent share options granted by the Group, including performance-based options, where the scheme to date performance is deemed to have been earned. It also includes the number of shares that would be issued if all convertible bonds are assumed to be converted unless the convertible instrument is out-of-the-money and not expected to convert. All operations are continuing for the periods presented.

 
                                                            1 September     Year to 31 
                                                    2022 to 3 September    August 2022 
                                                                   2023 
------------------------------------------------  ---------------------  ------------- 
 Weighted average share capital 
 Weighted average shares in issue for basic 
  earnings per share (no. of shares)                        104,729,376     99,696,028 
 Weighted average effect of dilutive options                          -              - 
  (no. of shares)(1) 
 Weighted average effect of convertible bond                          -              - 
  (no. of shares)(2) 
 Weighted average shares in issue for diluted 
  earnings per share (no. of shares)                        104,729,376     99,696,028 
------------------------------------------------  ---------------------  ------------- 
 
 
 
 Loss after tax for the financial period (GBPm) 
 Loss attributable to owners of the parent 
  company for basic earnings per share                          (223.1)         (30.8) 
 Interest expense on convertible bonds(1)                   -                  - 
 Diluted loss attributable to owners of the 
  parent company for diluted loss per share                     (223.1)         (30.8) 
------------------------------------------------  ---------------------  ------------- 
 
 
 Basic loss per share (pence per share)                         (213.0)         (30.9) 
 Diluted loss per share (pence per share)                       (213.0)         (30.9) 
------------------------------------------------  ---------------------  ------------- 
 

(1) Dilutive shares and interest not included where their effect is anti-dilutive

(2) The impact of convertible bonds on the weighted average share capital has been excluded as it is not assumed they will be exercised

8 GOODWILL AND OTHER INTANGIBLE ASSETS

 
                             Goodwill   Brands         Customer   Domain   Software                Assets     Total 
                                                  relationships    names               under construction 
-------------------------- 
                                 GBPm     GBPm             GBPm     GBPm       GBPm                  GBPm      GBPm 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 Cost 
 As at 1 September 
  2022                           35.5    219.4             24.4      0.2      752.4                   3.6   1,035.5 
 Additions                          -        -                -        -      109.4                  17.1     126.5 
 Transfers                          -        -                -        -        1.7                 (1.7)         - 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 As at 3 September 
  2023                           35.5    219.4             24.4      0.2      863.5                  19.0   1,162.0 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 
 Accumulated amortisation 
  and impairment 
 As at 1 September 
  2022                            0.3     12.0              4.7        -      334.6            -              351.6 
 Amortisation expense               -      7.8              3.1        -       93.8            -              104.7 
 Impairment charge 
  for the period                    -        -                -        -        3.1                   2.1       5.2 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 As at 3 September 
  2023                            0.3     19.8              7.8        -      431.5                   2.1     461.5 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 
 Net book value 
  at 3 September 2023            35.2    199.6             16.6      0.2      432.0                  16.9     700.5 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 
 Cost 
 As at 1 September 
  2021                           33.4    219.4             24.4      0.2      636.8                   0.8     915.0 
 Additions                        2.1        -                -        -      114.6                   3.8     120.5 
 Transfers                          -        -                -        -        1.0                 (1.0)         - 
 As at 31 August 
  2022                           35.5    219.4             24.4      0.2      752.4                   3.6   1,035.5 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 
 Accumulated amortisation 
  and impairment 
 As at 1 September 
  2021                            0.3      4.3              1.7        -      256.5            -              262.8 
 Amortisation expense               -      7.7              3.0        -       78.1            -               88.8 
 As at 31 August 
  2022                            0.3     12.0              4.7        -      334.6            -              351.6 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 
 Net book value at 
  31 August 2022                 35.2    207.4             19.7      0.2      417.8                   3.6     683.9 
--------------------------  ---------  -------  ---------------  -------  ---------  --------------------  -------- 
 

Intangible assets under construction relates to spend on software-based projects, including the enhancement of the Group's mobile apps/website, and other software. No individual projects are material in value.

9 PROPERTY, PLANT AND EQUIPMENT

 
                                      Fixtures,    Computer    Assets under   Total 
                                      fittings,    hardware    construction 
                                      plant and 
                                      machinery 
---------------------------------- 
                                           GBPm        GBPm            GBPm    GBPm 
----------------------------------  -----------  ----------  --------------  ------ 
 Cost 
 As at 1 September 2022                   408.5        41.1            65.4   515.0 
 Additions                                  1.1         0.6            46.2    47.9 
 Transfers                                  1.1         1.3           (2.4)       - 
 As at 3 September 2023                   410.7        43.0           109.2   562.9 
----------------------------------  -----------  ----------  --------------  ------ 
 
 Accumulated depreciation and 
  impairment 
 As at 1 September 2022                   134.8        26.0             2.5   163.3 
 Charge for the period                     25.4         6.0         -          31.4 
 Impairment charge for the period           5.2         0.1             0.3     5.6 
----------------------------------  ----------- 
 As at 3 September 2023                   165.4        32.1             2.8   200.3 
----------------------------------  -----------  ----------  --------------  ------ 
 
 Net book value at 3 September 
  2023                                    245.3        10.9           106.4   362.6 
----------------------------------  -----------  ----------  --------------  ------ 
 
 
 Cost 
 As at 1 September 2021                   386.2        34.4            16.1   436.7 
 Additions                                 21.5         6.7            50.1    78.3 
 Transfers                                  0.8           -           (0.8)       - 
---------------------------------- 
 As at 31 August 2022                     408.5        41.1            65.4   515.0 
----------------------------------  -----------  ----------  --------------  ------ 
 
 Accumulated depreciation and 
  impairment 
 As at 1 September 2021                   101.9        20.8         -         122.7 
 Charge for the year                       25.5         5.2         -          30.7 
 Impairment charge for the year             7.4           -             2.5     9.9 
---------------------------------- 
 As at 31 August 2022                     134.8        26.0             2.5   163.3 
----------------------------------  -----------  ----------  --------------  ------ 
 
 Net book value at 31 August 
  2022                                    273.7        15.1            62.9   351.7 
----------------------------------  -----------  ----------  --------------  ------ 
 

Significant assets under construction as at 3 September 2023 consisted primarily of amounts spent to automate the Atlanta fulfilment centre totalling GBP58.0m (2022: GBP41.5m) and the Lichfield fulfilment centre GBP46.8m (2022: GBP16.2m).

10 LEASES

Right-of-use assets

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period. Right-of-use assets comprise entirely leases for land and buildings.

 
                                              1 September     Year to 31 
                                      2022 to 3 September    August 2022 
                                                     2023 
---------------------------------- 
                                                     GBPm           GBPm 
----------------------------------  ---------------------  ------------- 
 At the beginning of the period                     380.3          345.2 
 Modifications                                      (9.6)           69.2 
 Impairment charge                                 (20.0)          (9.3) 
 Depreciation charge                               (35.9)         (30.3) 
 Transfers to investment property                  (12.8)              - 
 Foreign exchange differences                       (6.8)            5.5 
----------------------------------  ---------------------  ------------- 
 At the end of the period                           295.2          380.3 
----------------------------------  ---------------------  ------------- 
 

The Group presents additions to right-of-use assets in line with the disclosure requirements of IFRS 16 'Leases'. In doing so, modifications above includes the impact of lease terminations, modifications and reassessments, and changes to dilapidation estimates.

Right-of-use assets totalling GBP12.8m were transferred to investment property during the year and relate to sites the Group sublets, or that are currently vacant with the intention of subletting.

Lease liabilities

Set out below are the carrying amounts of lease liabilities and the movements during the period:

 
                                    1 September      Year to 
                                        2022 to    31 August 
                                    3 September         2022 
                                           2023 
-------------------------------- 
                                           GBPm         GBPm 
--------------------------------  -------------  ----------- 
 At the beginning of the period           380.1        328.9 
 Modifications                           (21.1)         71.3 
 Payments                                (28.0)       (31.7) 
 Interest expense                           5.6          5.4 
 Foreign exchange differences             (7.6)          6.2 
 At the end of the period                 329.0        380.1 
--------------------------------  -------------  ----------- 
 
 Current                                   25.3         24.3 
 Non-current                              303.7        355.8 
--------------------------------  -------------  ----------- 
 Total                                    329.0        380.1 
--------------------------------  -------------  ----------- 
 

11 CASH AND CASH EQUIVALENTS

 
                                       As at 3 September       As at 31 
                                                    2023    August 2022 
------------------------------------ 
                                                    GBPm           GBPm 
------------------------------------  ------------------  ------------- 
 Cash in hand and bank balances                     85.6          137.5 
 Money market fund investments                     142.7          145.5 
 Deposits at financial institutions                125.0           40.0 
------------------------------------  ------------------  ------------- 
 Closing cash and cash equivalents                 353.3          323.0 
------------------------------------  ------------------  ------------- 
 

Cash and cash equivalents includes uncleared payment provider receipts of GBP63.3m, which are typically due within 3 business days (2022: GBP51.2m).

Included within cash and cash equivalents is GBP4.1m (2022: GBP0.8m) of cash collected on behalf of partners of the Direct to Consumer fulfilment proposition 'Partner Fulfils'. ASOS Payments UK Limited and the Group are entitled to interest amounts earned on the deposits and amounts are held in a segregated bank account that is settled on a monthly basis.

12 TRADE AND OTHER PAYABLES

 
                                 As at 3 September       As at 31 
                                              2023    August 2022 
------------------------------ 
                                              GBPm           GBPm 
------------------------------  ------------------  ------------- 
 Trade payables                               71.3           94.0 
 Other payables                              174.7          255.6 
 Accruals                                    238.7          401.8 
 Returns provision                           108.2          147.2 
 Deferred revenue                             52.1           54.4 
 Taxation and social security                 35.4           40.3 
------------------------------  ------------------  ------------- 
                                             680.4          993.3 
------------------------------  ------------------  ------------- 
 

Trade and other payables have been presented in more detail than previously in order to provide more useful information to users of the financial statements. In doing so, the allocation between some categories has changed. Prior periods have been represented where relevant. The reduction in total trade and other payables is predominantly as a result of lower intake receipts and operating costs in the second half of the year as the Group transitions to its new commercial operating model.

13 BORROWINGS

 
                         As at 3 September   As at 31 August 
                                      2023              2022 
---------------------- 
                                      GBPm              GBPm 
----------------------  ------------------  ---------------- 
 Convertible bond                    464.4             451.0 
 Term Loan                           184.8                 - 
 Nordstrom loan                       20.4              22.0 
 Put option liability                  3.2               2.9 
 Total                               672.8             475.9 
----------------------  ------------------  ---------------- 
 
 Current                               1.5               1.4 
 Non-current                         671.3             474.5 
----------------------  ------------------  ---------------- 
 Total                               672.8             475.9 
----------------------  ------------------  ---------------- 
 

Convertible bonds

On 16 April 2021 the Group issued GBP500m of convertible bonds. The unsecured instruments pay a coupon of 0.75% until April 2026, or the conversion date, if earlier. The initial conversion price was set at GBP79.65 per share. The fair value of the debt component was determined using the market interest rate for an equivalent non-convertible bond, deemed to be 3.4%. As a result, GBP440.1m was recognised as a liability in the balance sheet on issue and the remainder of the proceeds, GBP59.9m, which represents the equity component, was credited to reserves. Issue costs of GBP9.0m were allocated between equity (GBP1.0m) and debt (GBP8.0m).

Term loan

In May 2023, the Group entered into a GBP200m senior term loan and a GBP75m super senior revolving facility (the "New RCF") (together the "New Facilities") with specialist lender Bantry Bay Capital Limited through to April 2026, with the optionality to further extend to May 2028 subject to meeting lender requirements. The New Facilities have replaced the previous GBP350m revolving credit facility (the "Old RCF") which was due to expire in November 2024 following the amendment and extension announced alongside the Company's interim results on 10 May 2023. Fees totalling GBP21.7m were incurred, of which GBP15.8m was applied to the term loan, with the remainder relating to the New RCF and capitalised within prepayments.

Both the senior term loan and New RCF (when drawn) bear interest at a margin above SONIA. The New RCF incurs commitment fees at a market rate.

The New Facilities are subject only to a minimum liquidity covenant defined as cash and cash equivalents plus amounts undrawn under the New RCF. The New Facilities carry a fixed and floating charge over all assets of the following chargors in the Group - ASOS Plc, ASOS.com Limited, ASOS Intermediate Holdings Limited, Mornington & Co (No. 1) Limited and Mornington & Co (No. 2) Limited.

Nordstrom Loan

On 12 July 2021 the Group announced a strategic partnership with Nordstrom, a US-based multi-channel retailer, to drive growth in North America. As part of this venture, Nordstrom purchased a minority interest in ASOS Holdings Limited which holds the Topshop, Topman, Miss Selfridge and HIIT brands in exchange for GBP10 as well as providing a GBP21.9m loan. The loan attracts interest at a market rate of 6.5% per annum. The resulting liability is GBP20.4m as at 3 September 2023 (2022: GBP22.0m), this is following a partial repayment of the loan totalling GBP1.7m (2022: GBPnil) being made in the period. As part of this agreement a written put option was provided to Nordstrom over their shares in ASOS Holdings Limited, valued at GBP3.2m as at 3 September 2023.

Refinancing fees included in cash flow

Refinancing fees included in the cash flow statement total GBP30.8m, and are reconciled to their location in the financial statements as follows:

 
                                                   Income statement                   Balance sheet 
                                        Administrative       Finance costs       Borrowings   Prepayments 
                                              expenses 
------------------------------  -----  ---------------  ----------------------  -----------  ------------ 
 Fee description                 Cash          Outside     Outside      Within 
                                              adjusted    adjusted    adjusted 
                                                profit      profit      profit 
------------------------------ 
                                 GBPm             GBPm        GBPm        GBPm         GBPm          GBPm 
------------------------------  -----  ---------------  ----------  ----------  -----------  ------------ 
 Fees incurred in relation 
  to covenant waiver exercise 
  in October 2022                 7.1              1.7         4.0         1.4            -             - 
 Extension fees incurred 
  in May 2023 for old RCF         2.0                -         2.0           -            -             - 
 Refinancing fees for New 
  Facilities                     21.7                -           -           -         15.8           5.9 
 Total                           30.8              1.7         6.0         1.4         15.8           5.9 
------------------------------         ---------------  ----------              -----------  ------------ 
 
 Other non-cash (write off          -                -         0.4           -            -             - 
  of previously capitalised 
  fees) 
 Total                           30.8              1.7         6.4         1.4         15.8           5.9 
------------------------------         ---------------  ----------              -----------  ------------ 
 

14 PROVISIONS

 
                                      Dilapidations       Onerous    Total 
                                                        occupancy 
---------------------------------- 
                                               GBPm          GBPm     GBPm 
----------------------------------  ---------------  ------------  ------- 
 As at 1 September 2022                        41.9        -          41.9 
 Recognised                                    11.2          18.3     29.5 
 Utilised                                  -                (1.8)    (1.8) 
 Unwinding of discount                          1.3           0.3      1.6 
 Exchange differences                         (1.0)             -    (1.0) 
---------------------------------- 
 As at 3 September 2023                        53.4          16.8     70.2 
----------------------------------  ---------------  ------------  ------- 
 
 Current                                          -           2.0      2.0 
 Non-current                                   53.4          14.8     68.2 
---------------------------------- 
 As at 3 September 2023                        53.4          16.8     70.2 
----------------------------------  ---------------  ------------  ------- 
 
 As at 1 September 2021                        43.2        -          43.2 
 Recognised                                    10.8        -          10.8 
 Effects of movements in discount 
  rates                                      (13.2)        -        (13.2) 
 Unwinding of discount                          0.2        -           0.2 
 Exchange differences                           0.9        -           0.9 
---------------------------------- 
 As at 31 August 2022                          41.9        -          41.9 
----------------------------------  ---------------  ------------  ------- 
 
 Current                                          -        -          - 
 Non-current                                   41.9        -          41.9 
----------------------------------  ---------------  ------------  ------- 
 As at 31 August 2022                          41.9        -          41.9 
----------------------------------  ---------------  ------------  ------- 
 

Dilapidations are recognised where there is a present obligation to repair and restore leased properties to their preoccupancy state at the end of the lease term.

Where the Group no longer operates from a leased property, onerous property contract provisions are recognised for the least net cost of exiting from the contract. The amounts provided are based on the Group's best estimates of the likely committed outflows and site closure dates. These provisions do not include rent in accordance with IFRS 16, however do include unavoidable costs related to the lease such as service charges and insurance.

15 NET DEBT RECONCILIATION

Group net debt comprises cash and cash equivalents less any borrowings drawn down at period-end (including accrued interest), but excluding outstanding lease liabilities.

 
                                         Lease   Borrowings   Cash and cash     Total 
                                   liabilities                  equivalents 
------------------------------- 
                                          GBPm         GBPm            GBPm      GBPm 
-------------------------------  -------------  -----------  --------------  -------- 
 As at 1 September 2022                (380.1)      (475.9)           323.0   (533.0) 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 Cash flow movements                      28.0      (154.5)            27.6    (98.9) 
 Cash flow excluding interest             22.4      (198.3)            32.1   (143.8) 
 Net interest paid/(received)              5.6         28.0           (4.5)      29.1 
 Financing fees paid                         -         15.8               -      15.8 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 Non-cash movements                       23.1       (42.4)             2.7    (16.6) 
 Movement in lease liabilities            21.1            -               -      21.1 
 Foreign exchange impacts                  7.6            -           (1.8)       5.8 
 Accrued interest                        (5.6)       (42.4)             4.5    (43.5) 
-------------------------------  -------------  -----------  --------------  -------- 
 
 As at 3 September 2023                (329.0)      (672.8)           353.3   (648.5) 
 Net debt (excluding leases)                                                  (319.5) 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 As at 1 September 2021                (328.9)      (463.2)           662.7   (129.4) 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 Cash flow movements                      31.7          5.7         (340.7)   (303.3) 
 Cash flow excluding interest             26.3            -         (339.8)   (313.5) 
 Net interest paid/(received)              5.4          5.7           (0.9)      10.2 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 Non-cash movements                     (82.9)       (18.4)             1.0   (100.3) 
 Movement in lease liabilities          (71.3)            -               -    (71.3) 
 Foreign exchange impacts                (6.2)            -             0.1     (6.1) 
 Accrued interest                        (5.4)       (18.4)             0.9    (22.9) 
-------------------------------  -------------  -----------  --------------  -------- 
 
 
 As at 31 August 2022                  (380.1)      (475.9)           323.0   (533.0) 
 Net debt (excluding leases)                                                  (152.9) 
-------------------------------  -------------  -----------  --------------  -------- 
 

16 CONTINGENT LIABILITIES

From time to time, the Group is subject to various legal proceedings and claims that arise in the ordinary course of business, which due to the fast-growing nature of the Group and its ecommerce base, may concern the Group's brand and trading name or its product designs. All such cases brought against the Group are robustly defended and a liability is recorded only when it is probable that the case will result in a future economic outflow which can be reliably measured.

The Group is currently party to legal proceedings in overseas territories. These proceedings are in their very early stages and the Group is robustly defending them. Given the early stages, the Group cannot make any assessment of the likelihood nor quantum of any outcome. No provision has therefore been recognised on the Group's balance sheet.

The Group is currently party to a voluntary disclosure made to an overseas tax authority in relation to potentially overclaimed VAT. Suppliers to the Group have historically charged VAT on services which should possibly have been charged without VAT. If it is concluded that VAT should not have been charged, ASOS will be required to either repay circa GBP90m to the related tax authority and reclaim said amounts from the suppliers or reach multi-party, non-cash agreements between the tax authority, the suppliers and ASOS. At this time it is unclear whether VAT should or should not have been charged, with facts supporting both views. The correct position will ultimately be determined by the relevant tax authorities, and as a result the Group considers there to be only a possible risk that a payment will be required. The Group is actively working with the suppliers and tax authorities to conclude and notes that in either scenario the tax authority concerned has not suffered a loss of tax revenue as amounts claimed by ASOS have been matched by payments made by suppliers.

17 POST BALANCE SHEET EVENTS

After the balance sheet date, on 6 October 2023, the Board approved the commencement of a process to either sell or mothball the Lichfield fulfilment centre, following completion of the automation project in late FY24. At the year-end, the site was in use and will remain as such until the automation work completes.

At the year-end, assets held in relation to Lichfield totalled circa GBP110m, as well as lease liabilities of circa GBP30m. Costs to complete the automation are estimated at GBP45m. As a result of the decision, an impairment of the existing assets is likely to be required, which together with committed future automation spend, will be recognised directly within administrative expenses, and outside adjusted profit. Any impairments are ultimately dependent on future decisions regarding the site, which include recommissioning the site, leaving vacant, or securing the sale of the related equipment and assigning the lease.

ALTERNATIVE PERFORMANCE MEASURES (APMs)

The Group uses the below non-IFRS performance measures to allow shareholders to better understand underlying financial performance and position. These should not be seen as substitutes for IFRS measures of performance and may not allow a direct comparison to other companies.

 
 Performance     Closest     Definition               How ASOS uses this measure 
  measure         IFRS 
                  measure 
--------------  ----------  -----------------------  ----------------------------------------------------------------- 
 Revenue         None        ASOS calculates          This measure is presented as a means of 
  growth                     constant currency         eliminating the effects of exchange rate 
  at constant                (CCY) growth              fluctuations on the period-on-period reported 
  currency                   by adjusting              results. 
                             the current year 
                             reported revenue 
                             number for the 
                             impact of year-on- 
                             year changes 
                             in the hedge 
                             rate on hedged 
                             sales and year-on-year 
                             spot rate movements 
                             on unhedged sales. 
                             The current period 
                             also adjusts 
                             for the impact 
                             of the three 
                             additional trading 
                             days in FY23. 
                             This provides 
                             revenue growth 
                             on a like-for-like 
                             basis vs. last 
                             year, giving 
                             users of the 
                             accounts a better 
                             view of underlying 
                             sales performance 
                             that is not impacted 
                             by exchange rate 
                             fluctuations. 
                            ----------------------- 
                                                                                 1 September        Year to     Growth 
                                                                                     2022 to      31 August 
                                                                                 3 September           2022 
                                                                                        2023 
                            ----------------------- 
                                                                                        GBPm           GBPm          % 
                                                     ------------------------  -------------  -------------  --------- 
    Adjusted Revenue(1)                                                              3,448.0        3,859.7      (11)% 
                                                      Impact of foreign                101.5              -          - 
                                                       exchange translation, 
                                                       non-underlying 
                                                       Jobber income and 
                                                       LFL financial periods 
                                                      Excluding Russia                     -           76.8          - 
                                                                                                             --------- 
    Group revenue                                                                    3,549.5        3,936.5      (10)% 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
    1 Adjusted revenue, stated on a constant 
     currency basis, excluding Russia from H1 
     FY22, and removing the impact of the 3 
     extra trading days in FY23. 
 
 
                                                                                     Year to        Year to     Growth 
                                                                                   31 August      31 August 
                                                                                        2022           2021 
                                                                                        GBPm           GBPm          % 
                                                     ------------------------  -------------  -------------  --------- 
    Revenue at constant 
     currency                                                                        3,972.7        3,910.5         2% 
                                                      Impact of foreign               (36.2)              -          - 
                                                       exchange translation 
                                                     ------------------------  -------------  -------------  --------- 
    Group revenue                                                                    3,936.5        3,910.5         1% 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
 
 Retail          Revenue     Internet sales           A measure of the Group's trading performance 
  sales                       recorded net             focusing on the sale of products to end 
                              of an appropriate        customers. Used by management to monitor 
                              deduction for            overall performance across markets, and 
                              actual and expected      the basis of key internal KPIs such as 
                              returns, relevant        ABV. 
                              vouchers, discounts 
                              and sales taxes. 
--------------  ---------- 
 
                             Retail sales             A reconciliation of this measure is included 
                              exclude income           in Note 4. 
                              from delivery 
                              receipt payments, 
                              marketing services, 
                              commission on 
                              partner-fulfilled 
                              sales and revenue 
                              from wholesale 
                              sales. 
--------------  ----------  -----------------------  ----------------------------------------------------------------- 
 Adjusted        Revenue     Revenue excluding        A measure of the Group's revenue and gross 
  revenue                     the impact of            profitability, excluding the impact of 
                              adjusting items.         any adjusting items. 
  Adjusted        None 
  gross                       Gross profit 
  margin                      divided by revenue 
                              and excluding 
                              the impact of 
                              adjusting items. 
 
    Reconciliation is shown below: 
 
                                                                                                1 September       Year 
                                                                                                    2022 to      to 31 
                                                                                                3 September     August 
                                                                                                       2023       2022 
                                                     ------------------------  ------------- 
                                                                                                       GBPm       GBPm 
                                                     ------------------------  -------------  -------------  --------- 
    Revenue                                                                                         3,549.5    3,936.5 
                                                      Adjusting items                                (11.5)          - 
                                                     ------------------------  -------------  -------------  --------- 
    Adjusted revenue                                                                                3,538.0    3,936.5 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
    Gross profit                                                                                    1,459.0    1,717.5 
                                                      Adjusting items                                 104.4          - 
                                                     ------------------------  -------------  -------------  --------- 
    Adjusted gross 
     profit                                                                                         1,563.4    1,717.5 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
    Gross margin                                                                                      41.1%      43.6% 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
    Adjusted gross 
     margin %                                                                                         44.2%      43.6% 
   --------------------------------------------------------------------------  -------------  -------------  --------- 
 
 
 
 Performance       Closest           Definition                 How ASOS uses this measure 
  measure           IFRS measure 
----------------  ----------------  -------------------------  --------------------------------------------------------------- 
 Adjusted          Operating         Profit before              A measure of the Group's underlying profitability 
  EBIT              (loss)/profit     tax, interest,             for the period, excluding the impact of 
                                      and any adjusting          any transactions outside of the ordinary 
                                      items excluded             course of business and not considered to 
                                      from adjusted              be part of ASOS' usual cost base. Used 
                    (Loss)/profit     profit before              by management to monitor the performance 
  Adjusted          before            tax (see below).           of the business each month. 
  (loss)/profit     tax 
  before                              Adjusted (loss)/profit 
  tax                                 before tax excludes 
                                      items recognised 
                                      in reported 
                                      profit or loss 
                                      before tax which, 
                                      if included, 
                                      could distort 
                                      comparability 
                                      between periods. 
                                      In determining 
                                      which items 
                                      to exclude, 
                                      the Group considers 
                                      items which 
                                      are significant 
                                      either by virtue 
                                      of their size 
                                      and/or nature, 
                                      or that are 
                                      non-recurring. 
 
                                                                                                    1 September           Year 
                                                                                                        2022 to          to 31 
                                                                                                    3 September         August 
                                                                                                           2023           2022 
                                                                                                           GBPm           GBPm 
                                                               ----------------------------  ------------------  ------------- 
    Operating loss                                                                                      (248.5)          (9.8) 
    Adjusting items excluding 
     finance costs (Note 3)                                                                               219.5           53.9 
    Adjusted EBIT                                                                                        (29.0)           44.1 
   ----------------------------------------------------------------------------------------  ------------------  ------------- 
 
    Net finance costs (Note 
     5)                                                                                                  (48.2)         (22.1) 
                                                                Add back adjusting finance                  6.9              - 
                                                                 costs (Note 3) 
    Adjusted (loss)/profit 
     before tax                                                                                          (70.3)           22.0 
   ----------------------------------------------------------------------------------------  ------------------  ------------- 
 
    Group revenue                                                                                       3,549.5        3,936.5 
                                                                Adjusting items                          (11.5)              - 
                                                               ----------------------------  ------------------  ------------- 
    Adjusted Group revenue                                                                              3,538.0        3,936.5 
   ----------------------------------------------------------------------------------------  ------------------  ------------- 
 
    Adjusted EBIT margin                                                                                 (0.8)%           1.1% 
   ----------------------------------------------------------------------------------------  ------------------  ------------- 
 
    Details of adjusting items are included 
     within Note 3. 
 
 
 Adjusted          No direct         Adjusted EBIT              EBITDA is used to review the Group's profit 
  EBITDA            equivalent        above, adjusted            generation and the sustainability of ongoing 
                                      for depreciation,          capital reinvestment and finance costs. 
                                      amortisation                                               1 September      Year to 
                                      and impairments.                                               2022 to    31 August 
                                                                                                 3 September         2022 
                                                                                                        2023 
                                                                                                        GBPm         GBPm 
                                                                 ----------------------------  -------------  ----------- 
                                                                  Adjusted EBIT (above)         (29.0)         44.1 
                                                                  Add back depreciation 
                                                                   and amortisation (per 
                                                                   cash flow)                   172.5          149.8 
                                                                  Add back impairment 
                                                                   (per cash flow)              32.1           19.2 
                                                                  Less depreciation 
                                                                   and amortisation excluded 
                                                                   from adjusted profit(1)      (19.6)         (10.7) 
                                                                  Less impairment excluded 
                                                                   from adjusted profit(2)      (31.5)         (18.5) 
                                                                  Adjusted EBITDA               124.5          183.9 
                                                                 ----------------------------  -------------  ----------- 
 
 
                                                                 1 Comprises GBP18.3m within property initiatives, 
                                                                 and GBP1.3m within the commercial operating 
                                                                 model change 
                                                                 2 Comprises GBP28.6m within property initiatives, 
                                                                 and GBP2.9m within strategic initiatives 
----------------  ----------------  -------------------------  --------------------------------------------------------------- 
 
 
 Performance        Closest          Definition                How ASOS uses this measure 
  measure            IFRS measure 
-----------------  ---------------  ------------------------ 
 Net cash/(debt)    No direct        Cash and cash             A measure of the Group's liquidity. 
                     equivalent       equivalents 
                                      less the carrying 
                                      value of borrowings 
                                      (including 
                                      accrued interest) 
                                      drawn down 
                                      at period-end, 
                                      but excluding 
                                      outstanding 
                                      lease liabilities. 
 
    Information is included in Note 15. A reconciliation 
     is included below: 
 
                                                                                              1 September      Year to 
                                                                                                  2022 to    31 August 
                                                                                              3 September         2022 
                                                                                                     2023 
                                                              ---------------------------- 
                                                                                                     GBPm         GBPm 
                                                              ----------------------------  -------------  ----------- 
    Cash and cash equivalents                                                                       353.3        323.0 
    Borrowings                                                                                    (672.8)      (475.9) 
    Lease liabilities                                                                             (329.0)      (380.1) 
   ---------------------------------------------------------------------------------------  -------------  ----------- 
    Net borrowings                                                                                (648.5)      (533.0) 
    Add-back lease liabilities                                                                      329.0        380.1 
   ---------------------------------------------------------------------------------------  -------------  ----------- 
    Group net debt                                                                                (319.5)      (152.9) 
   ---------------------------------------------------------------------------------------  -------------  ----------- 
 
 Free cash          No direct        Free cash flow            A measure of the cash generated by the 
  flow               equivalent       is net cash               Group outside cash flows relating to M&A 
                                      generated from            and financing transactions, which allows 
                                      operating activities,     management to better assess the cash being 
                                      less payments             generated by the business. 
                                      to acquire 
                                      intangible 
                                      and tangible 
                                      assets, payment 
                                      of the principal 
                                      portion of 
                                      lease liabilities 
                                      and net finance 
                                      expenses. 
 
    A reconciliation to the Group cash flow 
     is shown below: 
 
                                                                                              1 September      Year to 
                                                                                                  2022 to    31 August 
                                                                                              3 September         2022 
                                                                                                     2023 
                                                                                                     GBPm         GBPm 
                                                              ----------------------------  -------------  ----------- 
    Cash used generated from/(used 
     in) operations (per cash 
     flow)                                                                                           16.4      (120.4) 
    Purchase of tangible and 
     intangible assets                                                                            (177.9)      (182.9) 
    Repayment of principal 
     portion of lease liabilities                                                                  (22.4)       (26.3) 
    Net interest paid                                                                              (29.1)       (10.2) 
    Free cash flow                                                                                (213.0)      (339.8) 
   ---------------------------------------------------------------------------------------  -------------  ----------- 
 
 

Appendix 1 - Total sales growth by period in sterling, including Russia

Period to 3 September 2023

 
                                                                             2022/23 
GBPm              P1(1)    YOY%   P2(1)  YOY%   P3(1)  YOY%   P4(1)  YOY%     FY      YOY% 
                  -------         -----         -----         -----         -------- 
UK total sales    591.3    (8%)   212.4  (15%)  370.3  (14%)  380.4  (13%)  1,554.4   (12%) 
EU total sales    417.3    7%     169.3  (10%)  283.5  (4%)   286.6  (4%)   1,156.7   (1%) 
US total sales    198.1    15%    71.1   (11%)  121.2  (15%)  110.7  (19%)  501.1     (6%) 
ROW total sales   129.8    (30%)  51.3   (45%)  83.9   (13%)  72.3   (26%)  337.3     (29%) 
Total sales(3)    1,336.5  (4%)   504.1  (17%)  858.9  (11%)  850.0  (12%)  3,549.5   (10%) 
                  -------         -----         -----         -----         -------- 
 
 

Year ended 31 August 2022

 
 
  GBPm            P1(1)    YOY%   P2(1)  YOY%  P3(1)    YOY%   P4(1)  YOY%    2021/22  YOY% 
                  -------         -----        -------         -----         -------- 
UK total sales    645.2    13%    250.3  (2%)  431.8    4%     435.5  6%     1,762.8   7% 
EU total sales    390.2    (3%)   187.2  (3%)  294.0    (5%)   298.6  6%     1,170.0   (1%) 
US total sales    172.6    7%     80.1   13%   141.9    21%    136.8  18%    531.4     14% 
ROW total sales   185.1    (20%)  93.4   1%    96.4(2)  (33%)  97.4   (30%)  472.3     (22%) 
                                               964.1 
Total sales(3)    1,393.1  2%     611.0  -%     (2)     (2%)   968.3  2%     3,936.5   1% 
                  -------         -----        -------         -----         -------- 
 

Year ended 31 August 2021

 
 
  GBPm            P1(1)    YOY%  P2(1)  YOY%  P3(1,4)  YOY%  P4(1,4)  YOY%    2020/21  YOY% 
                  -------        -----        -------        -------         -------- 
UK total sales    571.3    35%   254.5  46%   415.9    85%   410.3    5%     1,652.0   36% 
EU total sales    400.6    18%   193.8  22%   310.1    33%   280.8    (6%)   1,185.3   15% 
US total sales    161.7    12%   71.2   8%    117.5    25%   115.8    4%     466.2     12% 
ROW total sales   230.5    16%   92.3   1%    144.5    2%    139.7    (19%)  607.0     1% 
Total sales(3)    1,364.1  23%   611.8  25%   988.0    43%   946.6    (3%)   3,910.5   20% 
                  -------        -----        -------        -------         -------- 
 

(1) Periods are as follows:

P1: four months to 31 December

P2: two months to 28/29 February

P3: three months to 31 May

P4: three months to 31 August at year-end 2021 and 2022, period to 3 September in 2023

(2) In the tables above RoW and Group total sales for P3 have been restated. This restatement relates to the removal of the GBP19.3m gain on RUB hedges, which was reported as revenue at P3 but subsequently reallocated to other income at year-end 2022.

(3) Includes retail sales, wholesale and income from other services comprising delivery receipt payments, marketing services and commission on partner-fulfilled sales.

(4) P3 is restated to reflect only March, April, and May. P4 has been restated to include June.

Appendix 2 - Total sales growth by period at constant currency, including Russia

Period to 3 September 2023

 
                  P1 (1)  P2 (1)  P3 (1)  P4 (1)  2022/23 
GBPm               YOY%    YOY%    YOY%    YOY%    YOY% 
UK total sales    (8%)    (15%)   (14%)   (13%)   (12%) 
EU total sales    6%      (12%)   (7%)    (4%)    (3%) 
US total sales    (2%)    (20%)   (20%)   (16%)   (13%) 
ROW total sales   (31%)   (46%)   (14%)   (25%)   (30%) 
Total sales(3)    (6%)    (20%)   (13%)   (12%)   (11%) 
 
 

Year ended 31 August 2022

 
                  P1 (1)  P2 (1)  P3 (1)    P4 (1)  2021/22 
  GBPm             YOY%    YOY%    YOY%      YOY%    YOY% 
UK total sales    13%     (2%)    4%        6%      7% 
EU total sales    2%      1%      (2%)      9%      2% 
US total sales    11%     12%     15%       4%      10% 
ROW total sales   (15%)   2%      (33%)(2)  (31%)   (20%) 
Total sales(3)    5%      1%      (2%) (2)  1%      2% 
 

Year ended 31 August 2021

 
                  P1 (1)  P2 (1)  P3 (1,4)  P4 (1,4)  2020/21 
  GBPm             YOY%    YOY%    YOY%      YOY%      YOY% 
UK total sales    35%     46%     85%       5%        36% 
EU total sales    17%     20%     34%       (7%)      15% 
US total sales    16%     13%     40%       15%       21% 
ROW total sales   20%     9%      10%       (14%)     6% 
Total sales(3)    24%     26%     47%       (1%)      22% 
 

(1) Periods are as follows:

P1: four months to 31 December

P2: two months to 28/29 February

P3: three months to 31 May

P4: three months to 31 August at year-end 2021 and 2022, period to 3 September in 2023

(2) In the tables above RoW and Group total sales for P3 have been restated. This restatement relates to the removal of the GBP19.3m gain on RUB hedges, which was reported as revenue at P3 but subsequently reallocated to other income at year-end 2022.

(3) Includes retail sales, wholesale and income from other services comprising delivery receipt payments, marketing services and commission on partner-fulfilled sales.

(4) P3 is restated to reflect only March, April, and May. P4 has been restated to include June.

Appendix 3 - Total adjusted(1) sales growth by period at constant currency, excluding Russia

Period to 3 September 2023

 
                                                       2022/23 
                     P1 (2)  P2 (2)  P3 (2)  P4 (2,5)   (5) 
GBPm                  YOY%    YOY%    YOY%    YOY%      YOY% 
UK total sales       (9%)    (15%)   (15%)   (16%)     (13%) 
EU total sales       6%      (12%)   (8%)    (7%)      (4%) 
US total sales       (2%)    (20%)   (21%)   (19%)     (14%) 
ROW total sales(4)   (10%)   (16%)   (14%)   (28%)     (16%) 
Total sales(3)       (4%)    (15%)   (14%)   (15%)     (11%) 
 
 

Year ended 31 August 2022

 
                     P1 (2)  P2 (2)  P3 (2)   P4 (2)  2021/22 
  GBPm                YOY%    YOY%    YOY%     YOY%    YOY% 
UK total sales       13%     (2%)    4%       6%      7% 
EU total sales       2%      1%      (2%)     9%      2% 
US total sales       11%     12%     15%      4%      10% 
ROW total sales(4)                   (7%)(6)  (4%) 
Total sales(3)                       2% (6)   6% 
 

(1) Adjusted sales are reported sales excluding non-underlying items

(2) Periods are as follows:

P1: four months to 31 December

P2: two months to 28/29 February

P3: three months to 31 May

P4: three months to 31 August at year-end 2021 and 2022, period to 3 September at 2023

(3) Includes retail sales, wholesale and income from other services comprising delivery receipt payments, marketing services and commission on partner-fulfilled sales.

(4) Calculation of metrics, or movements in metrics, on an ex-Russia basis involves the removal of Russia from H1 FY22 performance following the decision to suspend trade in Russia on 2 March 2022.

(5) LFL growth calculated by removing the impact of the 3 extra trading days in FY23

(6) In the tables above RoW and Group total sales for P3 have been restated. This restatement relates to the removal of the GBP19.3m gain on RUB hedges, which was reported as revenue at P3 but subsequently reallocated to other income at year-end 2022.

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