Asos advances to a premium listing on London’s main market – at last

That’s a useful New Year resolution from Asos: stop hanging around with the small fry on the junior Alternative Investment Market (Aim) and get a premium listing on London’s main market. It shows a certain seriousness, which is the least shareholders deserve after Asos’ rotten 2021, which was capped with a thumping profits warning last October.

Promotion will happen by the end of next month and the mystery is why it wasn’t sought earlier in 20 years as a listed company. During the high points for its share price, remember, Asos was worth as much as £5bn, which is borderline FTSE 100 territory. The arguments offered in favour on Thursday – boosting the corporate profile and widening the pool of potential investors – could have been made 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 factor in delay. Or perhaps management didn’t fancy the princely legal fees involved in making the switch. Tough: sometimes you have to pay through the nose anyway.

There’s no guarantee that main market status will make Asos’ share price any less volatile (the market capitalisation is £2.25bn these days) but two points are worth making. First, the timing is good in the sense that the latest trading update produced no fresh bad news – the shares rose 10%.

Second, the move will “set the cat amongst the pigeons at Boohoo HQ”, as independent retail analyst Nick Bubb put it. Well, quite. Boohoo would struggle to get off 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 crisis in 2020 over pay and working conditions in its Leicester factories.

Asos, by contrast, is the one that didn’t get into a similar scrape and runs a broadly conventional governance setup (Ian Dyson, ex M&S finance director, has just taken over as non-executive chairman from BT-bound Adam Crozier). At a moment when investors are wondering about post-lockdown cracks in the pure internet retailing model, there is no harm at all in Asos emphasising its differences.

Share price slide at Countryside

It ought to be hard for a housebuilder not to enjoy today’s bubbly conditions in the property market, but Countryside Properties has managed it: the first quarter targets were missed by a country mile. Operating profit more than halved – from £36.6m to £16.5m. Chief executive Iain McPherson, inevitably, has gone with immediate effect.

But shareholders in the FTSE 250 firm are still left to wonder what, precisely, has gone wrong. Chair John Martin, the ex-Ferguson boss who will pick up McPherson’s trowel until a new chief executive is found, mentioned issues of “operational execution”, but he’ll only offer a fuller account once he’s been through the business on a site-by-site basis, which he says could take ten weeks.

That’s a long time to wait and fret about the size of the damage to a forecast, made only seven weeks ago, of operating profits of £200m-£210m in the financial year that ends in September. The 21% plunge in the share price betrays the uncertainty over whether this is a case of a single bad quarter or something worse. Either way, Countryside’s ra-ra rhetoric in November about “the compelling opportunity that is ahead of us”, as the company focuses entirely on local authority and housing association schemes, may need a rewrite.

The good news, of a sort, is that only £60m from a £450m share buy-back programme launched last July has been squandered at out-of-date prices. But it’s not much consolation until Martin reveals the size of the repair job.

A minor miracle at M&S?

Profit upgrades are clearly baked into expectations at retailers. Marks & Spencer didn’t budge on its £500m forecast for this financial year, merely strengthening its language from November’s “in the region of” to “at least”, and was rewarded with an 8% fall in its share price. Never mind, the stock is still up 70% in 12 months.

Indeed, long-term investors may care more about a striking figure in the update: full-price sales in the clothing and home department rose by 45% in the last 13 weeks of 2021 versus two years ago. If that represents clinching evidence that M&S has definitively kicked its addiction to panicky “friends and family” promotions, a minor miracle has occurred. With its food side going gangbusters, M&S looks healthy – finally.


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