Despite turnover increasing 13 per cent year-on-year e-commerce giant ASOS has reported a 68 per cent drop in pre-tax profit.
ASOS posted pre-tax profit of £33.1m for the year-ending 31 August 2019, compared to £102m in the previous financial year. Turnover stood at £2.7 billion up from £2.4 billion a year ago.
Chief executive Nick 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.”
This investment is reflected in many aspects of the company, including a net debt of £90.5m reflecting elevated cap-ex investment to support its global logistics platform.
Beighton said: ”Having identified the root causes of our operational issues, we have made substantial progress over the last few months in resolving them.” This includes rectifying automation and mechanism issues in its Euro Hub in Germany.
In July ASOS warned that higher warehouse transition costs, combined with sales impacted by operational challenges from on-going warehouse transformation programmes in Berlin and Atlanta, would impact profitability.
Beighton said: ”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 per cent 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.”
By Michelle Mooney