​Asos profits jump as it orders £200m equity raise to cope with coronavirus

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Asos has launched an equity share raise and extended its revolving credit facility to deal with the impact coronavirus on its business.

The fashion etailer is set to launch an equity share raise in order to protect its business from disrupted trading as a result of coronavirus, through which it expects to raise up to 18.8% of its existing share capital, or more than £200m.

The online retailer also plans to extend it existing revolving credit facility by £60-80m and apply to access the Bank of England’s Covid-19 corporate finance facility set up to lend money to larger companies in a bid to mitigate coronavirus-induced business disruption.

Asos said sales have plummeted between 20% and 25% in the last three weeks as a result of coronavirus and its equity raise and increased credit facility have been put in place in part to “weather no improvement in current trading for at least 18 months.”

Asos has also strengthened its board to cope with coronavirus and has appointed former McKinsey & Partners consultant Patrik Silén as its long-sought chief strategy officer.

Silén will join the business next month and report into chief executive Nick Beighton.

Asos has posted a ‘record’ uplift in interim pre-tax profit in the six months to February 29, up to £30.1m from £4m the previous year.

The fashion retailer’s group revenues have jumped 21% during the period to £1.6bn, up 20% in the UK to £577m.

Total order numbers rose 19% year on year to 41.1 million.

Chief executive Nick Beighton said: “Asos had a strong start to the year, making significant progress against the priorities we set out and delivering a better than anticipated first-half performance, driven by the operational improvements we are making to the business.

“Along with other businesses, we have been significantly impacted by the COVID-19 outbreak. Our first priority was to quickly put in place the necessary measures to ensure the health and wellbeing of our people.

“Since then, we have been focused on keeping our business delivering for customers whilst implementing a series of actions to mitigate the sales impact we have been experiencing. At the same time, we have been working to strengthen our financial position, including reaching agreement with our lenders to provide us with additional short-term financial flexibility.

“The Covid-19 crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focussed on making sure that ASOS emerges as a stronger and better business.”