Asos lifts off overseas but UK is tougher

ASOS yesterday reported a rise in profits fuelled by booming international markets, though UK growth slowed.

The company, which sells designer labels at discounted prices online, said revenue for the six months to the end of September was £217m, up more than 50 per cent on the same period last year.

Underlying profits – which strip out the cost of increasing warehouse capacity – surged by 66 per cent to £11.6m. International sales grew 150 per cent to £122m while UK sales were up a relatively paltry eight per cent to £88.6m. In the same period last year they soared by 26 per cent.

Asos chief executive Nick Robertson said young UK customers were seeing a squeeze on their incomes which meant less cash to buy clothes.

“People in their early twenties and younger are being hit, which presents challenges for us.

“International growth has been strong and we think there is a lot of potential in the US where there are 75m 18-34 year-olds compared with 14m in the UK.”

He added that sales in Australia were growing fast and that tax breaks on exports meant the margins on its overseas sales were better than in the domestic market.

Asos shares fell 1.7 per cent yesterday to close at £14.75.