// Asos chief executive remains confident on return to profitability as £300m cost savings turnaround plan takes affect
// The fashion etailer posted a reported pre-tax loss of £290.9m in the six months to February 28
Asos chief executive José Antonio Ramos Calamonte is confident the retailer will return to profitability in the second half of the year despite losses widening.
The online retailer posted a reported loss before tax of £290.9m in the six months to February 28, compared to a £15.8m loss the year before.
However, this included a £128.2m stock write-off, £49.4m of property impairments and £11m of associated implementation costs of its cost savings programme, the ‘Driving Change’ agenda. When adjusted, pre-tax loss was £87.4m.
Sales slipped 8% to £1.84bn due to a “challenging trading environment” and the impacts of the group’s profitability actions. UK revenue dropped 10%.
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Asos said it had delivered more than £100m of its £300m cost-savings agenda, with the remainder of savings expected for the second half of the financial year.
It forecasts a “low double-digit” decline in second half sales, assuming there is no improvement to the external trading environment, but expects to make £40 to 60m as it focuses on profitable sales.
Calamonte said: “Our focus is on improving our core profitability, prioritising order economics over top-line growth and I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions.
“While some of these changes have impacted short-term sales growth, there are many causes for optimism as we progress through the second half of the year.
“Initiatives are in place to drive a further £200m of benefit in the second half and I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond.”
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