FTSE 250 movers: Asos in fashion despite sales fall, cost cuts

(Sharecast News) - FTSE 250: 19,813.45, up 1.49% at 1546 GMT. Shares in online retailer Asos surged as the company insisted its turnaround remained on track on Thursday, despite a slide in sales over the crucial festive trading period.

The fast fashion brand said group revenues excluding Russia fell 3% in the four months to 31 December, "broadly in line with expectations", to £1.34bn, with UK sales down 8% on a constant currency basis.

Asos said the UK had been hit by weak consumer sentiment, first in September and then again in December, which was further affected by disruption in the delivery market after Royal Mail workers carried out a series of strikes.

"This resulted in earlier cut off dates for Christmas and New Year deliveries, and Asos reduced marketing spend in response," the retailer noted.

Asos is also coming up against tough comparatives. The pandemic saw a boom in online shopping but that tailed off after restrictions were lifted and shoppers returned to the high street.

However, the retailer insisted its turnaround remained on track and said it continued to expect "significantly improved profitability and cash generation" in the second half of the 2023 full year, following a forecast first-half loss.

Chief executive Jose Antonio Ramos Calamonte said: "We are undertaking necessary strategic and operational changes, with our focus shifting from prioritising top line growth to building a more relevant and competitive fashion business.

"We have made good early progress against a number of measures to simplify the business, including re-positioning our inventory profile reviewing our operational model in our top markets and reducing our cost base."

Hilton Food Group surged after saying full-year trading was in line with its expectations as it hailed a "pleasing" performance in the run-up to Christmas.

In an update for the year to 1 January 2023, the food packaging business pointed to continued revenue growth versus a year earlier.

In Asia Pacific, it saw strong top-line growth from its three facilities in Australia. This, along with the first full year of trading at its New Zealand food park, delivered further volume and revenue growth.

In the UK and Ireland, meanwhile, Hilton said it continued to make progress, with a strong Christmas trading period. The company also continued its investments in automation, the benefits of which will be seen in 2023.

"Recent progress to pass through and mitigate unprecedented inflationary cost increases, particularly in the UK Seafood business, have been encouraging and leave us well placed as we start the new year," Hilton said. "This work has progressed alongside a total business review in UK Seafood, which is starting to deliver positive results."

The group said its other businesses in Europe performed well, with revenue ahead of the previous year, thanks to the acquisition of Foppen and particularly strong trading in Central Europe.

"Given the recent trading performance and the group's strengths, including a diversified product offering, state-of-the art facilities, our technology driven supply chain expertise, and our strong position in ESG, the board remains confident in the outlook for 2023, despite the wider macroeconomic challenges," it said.

"The group's financial position continues to be strong with leverage and headroom at comfortable levels."

Pub group Mitchells and Butlers reported a rise in first-quarter sales as customers enjoyed their first Christmas free of Covid restrictions, but warned of a challenging outlook for the hospitality sector.

The company on Thursday, said strong trading over the festive season helped boost like-for-like sales in the year to date to 10.4%, with total sales growth of 13.3%. Sales in the five weeks to January 7 were up 23.9%.

"As expected, growth has significantly increased in the last five weeks due principally to last year being impacted by the emergence of the Omicron variant which resulted in a downturn in activity across much of the festive season," the company said in a trading update.

"Comparing to the same period in 2019, the last full financial year before Covid-19, like-for like sales were up 8.9%, with 9.2% growth in the first 10 weeks followed by 8.5% growth in the last five weeks, despite key recent weeks being negatively impacted by industrial action."

"However, we are mindful that the trading environment for the hospitality sector remains very challenging with inflationary costs putting sustained pressure both on the industry's margins and disposable income of our guests."

FTSE 250 - Risers

ASOS (ASC) 707.00p 20.65% Hilton Food Group (HFG) 622.00p 13.50% Volution Group (FAN) 414.50p 9.51% TUI AG Reg Shs (DI) (TUI) 167.30p 7.87% Genuit Group (GEN) 332.50p 6.06% Vistry Group (VTY) 738.00p 5.58% easyJet (EZJ) 414.50p 5.58% Telecom Plus (TEP) 2,180.00p 5.57% Wizz Air Holdings (WIZZ) 2,775.00p 4.95% Mitchells & Butlers (MAB) 170.60p 4.86%

FTSE 250 - Fallers

Synthomer (SYNT) 148.20p -3.20% CLS Holdings (CLI) 149.80p -1.96% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,225.00p -1.55% Abrdn Private Equity Opportunities Trust (APEO) 416.00p -1.42% RIT Capital Partners (RCP) 2,030.00p -1.22% W.A.G Payment Solutions (WPS) 73.10p -1.22% Syncona Limited NPV (SYNC) 168.20p -1.18% NB Private Equity Partners Ltd. (NBPE) 1,590.00p -0.93% Primary Health Properties (PHP) 115.20p -0.86% HGCapital Trust (HGT) 371.50p -0.67%