Asos finally gains a premium listing on London’s main market | Nils Pratley

JIt’s a good New Year’s resolution from Asos: stop hanging out with the small fry on the Alternative Investment Market (Aim) junior and get a premium listing on the main London market. It shows some seriousness, which is the least shareholders deserve after Asos’ 2021 rot, which was capped by a profit warning last October.

The promotion will take place by the end of next month and the mystery is why it hasn’t been sought after earlier in 20 years as a listed company. Remember that Asos was worth up to £5billion, which is on the edge of FTSE 100 territory. could have been advanced for about a decade.

The presence of a 25% shareholder in the form of Bestseller, the fashion group controlled by Danish billionaire Anders Holch Povlsen, may have been a delaying factor. Or maybe management didn’t like the princely legal fees involved in the change. Difficult: sometimes you have to pay through the nose anyway.

There’s no guarantee that main market status will make Asos’ share price less volatile (the market capitalization is £2.25bn these days), but two points are worth mentioning. be underlined. First of all, the timing is good in the sense that the last trade update did not produce any bad news – stocks rose 10%.

Second, the move “will put the cat among the pigeons at Boohoo headquarters”, as independent analyst Nick Bubb put it. Well, absolutely. Boohoo would struggle to exit the Aim market as long as co-founder and 12.5% ​​owner Mahmud Kamani insists on being executive chairman, even after the saga of the initially mishandled 2020 crisis over wages and working conditions at its factories in Leicester.

Asos, on the other hand, is the one who has not found itself in a similar situation and who manages a largely conventional governance configuration (Ian Dyson, former chief financial officer of M&S, has just taken over as non-executive chairman from Adam Crozier, linked to BT). At a time when investors are questioning post-lockdown cracks in the pure internet retail model, there’s no harm in Asos pointing out its differences.

Declining share price at Countryside

It should be hard for a homebuilder not to take advantage of today’s bubbly conditions in the real estate market, but Countryside Properties pulled it off: First quarter targets were missed by a country mile. Operating profit was cut by more than half – from £36.6m to £16.5m. Managing director Iain McPherson, inevitably, left with immediate effect.

But FTSE 250 shareholders still have to wonder what, precisely, went wrong. Chairman John Martin, the former Ferguson boss who will take over McPherson’s trowel until a new managing director is found, mentioned “operational execution” issues, but he won’t offer an account anymore. complete once he has walked through the business on a site-by-site basis, which he says could take ten weeks.

It’s a long time to wait and worry about the extent of the damage to a forecast, made just seven weeks ago, of operating profits of £200-210m for the financial year now ending in September. The 21% drop in the stock price betrays uncertainty over whether this is just one bad quarter or something worse. Either way, Countryside’s ra-ra rhetoric in November about ‘the fascinating opportunity ahead’, as the company focuses entirely on local authority and housing association programs, might need a rewrite. .

The good news, of sorts, is that just £60m of a £450m share buyback program launched last July has been wasted at outdated prices. But that’s not much consolation until Martin reveals the extent of the repair work.

A small miracle at M&S?

Profit upgrades are clearly built into retailer expectations. Marks & Spencer did not budge on its £500m forecast for this financial year, merely bolstering its November language “in the region of” to “at least”, and was rewarded with an 8% drop in the course of its action. Never mind, the title is still up 70% in 12 months.

Indeed, long-term investors might care more about one stark figure in the update: Full-price sales in the apparel and home department are up 45% in the past 13 weeks. of 2021 compared to two years ago. If this is irrefutable proof that M&S ​​has ended its reliance on panicked “friends and family” promotions for good, then a small miracle has happened. With its food side taking its toll, M&S looks healthy – finally.

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