Profits soared 253%! ASOS launches £500 million global expansion plan

According to foreign media reports, ASOS has recently launched a £500 million fundraising plan through unsecured convertible bonds to provide funding for its global expansion.

ASOS announces £500 million fundraising plan to focus on global expansion

The capital raising initiative is being led by ASOS’ wholly owned subsidiary Cornwall (Jersey) Limited, which will offer £500 million of senior unsecured secured convertible bonds due in 2026.

The net proceeds from the bonds will not only provide ASOS with greater flexibility to continue investing in its global growth strategy, but will also help refinance the Arcadia brand acquired in February 2021 .

The bonds will be issued at par with an estimated annual coupon of 0.50% to 1.00%, payable in installments on April 16 and October 16 each year, with the first interest payment due on October 16, 2021. The initial conversion price is expected to represent a premium of 45% to 50% over the reference share price.

News of ASOS's fundraising plans comes after it published its results for the six months to the end of February , as part of its new round of growth plans.

ASOS sees strong growth as profits soar 253%

It is reported that ASOS Group's revenue increased by 24% year-on-year to 1.98 billion pounds . Pre-tax profit also increased by 253% to 106.4 million pounds.

ASOS said it had benefited particularly from strong sales growth in the UK during the period, where sales rose 39% to £800.4m, compared with increases of 18% in the EU, 16% in the US and 16% in the rest of the world.

And, in the past six months, the pandemic has brought it 1.5 million active customer base, bringing its customer base to almost 25 million.

However, ASOS's profit margin fell by 200 basis points (or 2%) during the period due to increased freight and tariff costs, as well as the unfavorable impact of exchange rate fluctuations on the company.

“We believe the shift to online retail as a result of the pandemic and accelerated consolidation of offline retail has increased consumer confidence in online shopping, ” the company said . “In the coming months, as lockdown restrictions ease across markets, we expect a portion of consumer demand to return to stores, but we expect online penetration to remain structurally above pre-pandemic levels.”

Asos

profit

Global Expansion