Asos has reported a nosedive in its profit before tax despite strengthening sales in its full-year results, with boss Nick Beighton warning of more work ahead to turn the business around.

For the year to August 31, 2019 the pureplay fashion retailer reported profit before tax of £33.1m, down 68% from the same period in 2018, which the business blamed on “substantial transition and restructuring costs”.

However, after a year in which Asos made a number of profit warnings, the retailer reported a 13% increase in group revenues to in excess of £2.7bn and in retail sales to £2.6bn.

Asos also reported an 8% uptick in gross profit to £1.3bn, although its retail gross margin was down 250bps.

The pureplay retailer reported net debt of £90.5m for the year, which it said reflected “elevated capex investment in support of global logistics platforms”.

The retailer highlighted a strong fourth quarter of the financial year though, with sales for the period up 15% and visits to the Asos site up 20%. It also said its product rebalancing and stock build in the US was “progressing well”.

The retailer said that strengthening “organisational capability to deliver effectively into the future”, removing “non-strategic cost to support future growth and profitability” and further increasing “product choice, availability and newness”, were priorities for the 2020 financial year.

Beighton said: “This financial year was a pivotal period for Asos, where we have invested significantly and enhanced our global platform capability to drive our future growth. Regrettably this was more disruptive than we originally anticipated.

“However, having identified the root causes of our operational issues, we have made substantial progress over the last few months in resolving them. Whilst there remains lots of work to be done to get the business back on track, we are now in a more positive position to start the new financial year.

“Our focus now shifts to ensuring that we enhance our capability to drive an improved customer experience and leverage the benefits from the investments we have made. With over 60% of our revenue coming from international customers and a strong global logistics platform with capacity to grow, we are well positioned to take advantage of the global growth opportunity ahead of us.”

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