Asos (ASC) shares rose by 15 per cent in early trading after the fast fashion retailer said it had returned to profitability in the three months to 31 May. It announced a more than £20mn uplift in adjusted earnings versus last year putting the company on track to hit its adjusted cash profit guidance. Revenues were weak in the quarter, as expected, down 11 per cent to £859mn as active customer numbers fell by 800,000. But profit per order rose by over 30 per cent, and inventory levels were cut by 15 per cent against 2022.
Stifel analysts said that “the challenge remains for Asos as to whether it can return to a state of profitable, cash generative growth”. CA
Read why we’ve lost confidence in Asos
Scrapped IPO boss says London valuations far too meagre…
WE Soda cancelled its IPO on Wednesday, saying UK investors would not give it a valuation high enough to warrant going through with the float. The soda ash company, which is part of the Ciner Group conglomerate, had announced the IPO earlier in the month, in which a small chunk of the company would be sold to pay off intercompany debts. Soda ash is used in glassmaking and as a food and chemical additive.
This morning, chief executive Alasdair Warren – a former Deutsche Bank banker – told the BBC Today Show that the company would have taken a “15-20 per cent” discount to “fair value”. “[But] when that discount effectively doubles, you’ve got to consider whether it makes sense to launch an IPO at this time,” he added. He also said the company may look to New York when it considers another crack at public markets, given its growth projects are in the US. AH
Read more: WE Soda cancels IPO, unhappy with valuation prospects
Higher costs hurt Fuller’s profits
Premium pub company Fuller, Smith & Turner’s (FSTA) revenues rose by a third against the pandemic-scarred prior year, but like-for-like (LFL) sales were flat against the pre-Covid-19 era. Revenues came in at £337mn for the year to 1 April, while statutory profit before tax slipped by a tenth to £10.3mn as operating costs soared by 37 per cent due to cost inflation in energy, food, and wages. Sales growth has continued in recent trading, with LFL sales up by 13.9 per cent in the first 10 weeks of 2024.
Chief executive Simon Emeny said he is “more optimistic about the future than I have been since before the pandemic”. The shares rose by 1 per cent in early trading. CA
Read more: Analysts back pub stocks as consumer spending holds up
Legal & General appoints new boss
Life insurer Legal & General (LGEN) moved to fill the vacancy left by the retirement of long-serving chief executive Nigel Wilson by appointing Santander executive António Simões, in its first new appointment in more than a decade. Mr Simões was previously regional head of Europe for the Spanish bank and will take up the reins at L&G on 1 January.
A former partner of management consultancy firm McKinsey, Mr Simões’s banking background was reinforced by a 13-year stint with HSBC (HSBA). He takes over a firm built up by his predecessor into one of Europe’s largest asset managers with £1.3tn under management. JH
Read more: Higher rates give Legal & General £8bn cash boost
