ASOS, the online fashion retailer has posted strong full year results to 31 March 2010, ahead of forecasts as the Danish supplier, Bestseller, builds up a stake in the company - and margins in the last six months improved.
Danish supplier of youth brands Bestseller has over 1,200 stores worldwide plus franchise stores and shares are rising as the Danish CEO, Mr Anders Holch is known to pay a significant premium.
Bestseller is privately held and can be known seen as "the Danish Inditex".
Meanwhile at ASOS - As Seen On Screen - pre-tax profits were up 44 pct to £20.3 million ahead of forecasts of £19.9 million.
"It is not beyond the bounds of possibility that Bestseller might build on its 4.02% stake in ASOS." said Jean Roche at Panmure Gordon who has a 'buy' rating with a target price of 735p on the stock.
"We forecast revenue growth of 28.5% in FY2011 and PBT of £26.7m (consensus £26.5m). We think that our revenue forecast is unaggressive in view of ASOS' international growth plans (US, French and German tailored websites to be launched this year) and the acceleration in UK online clothing sales we have seen in April (+21.0% YoY)." she added.
Nick Robertson, CEO, commented:
"These are a strong set of results and the team have again delivered record sales and profits.
"We are more confident than at this time last year, with both UK and international sales accelerating well. We are keeping a very close eye on controlling our costs whilst at the same time encouraging the entrepreneurial and innovative spirit that drives all that we do.
"We are excited about the future and believe that online fashion will continue to outperform traditional retail channels. We are at the leading edge of our sector and see enormous potential to drive our business forward, both in the UK and internationally."
ASOS, which started out as a retailer to those wishing to 'dress like a celebrity', noted that product lines were up to 36,000 (2009: 22,000), net cash remained on the rise at £15.6 million and the company was debt free.
The launch of International sales - up 95 pct - made £63 million on group revenues up 35 pct to £223 million. Current trading for the 9 weeks to 6 June was up 56 pct (UK 36%, international 118%).
Basic earnings per share was up 50 pct to 20 pence and shares today opened higher by 19 pence, or 3 pct, at 08:17 BST.