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Asos board buys in as shares hit decade low

Insiders top up their stakes
Asos board buys in as shares hit decade low

Multiple board members at Asos (ASC) recently sensed a buying opportunity after a profit warning caused the online fast-fashion seller’s shares to drop in value by a third in a single day. 

The current inflationary storm caused Asos to cut guidance, predicting adjusted profits of between £20mn and £60mn for the year, compared with former consensus estimates of £92mn. The company said that inflationary pressure was “increasingly impacting our customers’ shopping behaviour”, with a higher number of purchases being returned.

Revenue growth is expected to slow to between 4 per cent and 7 per cent in the year to August, compared with a previous estimate of 11-13 per cent (ex-Russia). “As well as the impact of higher returns on warehousing and delivery costs, the guidance considers increased markdown and labour inefficiency to clear the returned stock,” the company said in a trading update.

This led shares to sink to their lowest level in over a decade. Liberum slashed its target price from £15 to £9 per share, saying that a raft of issues including a more cautious consumer, potential overstocking and the reopening of physical retail had been bad news for Asos. The broker kept its ‘hold’ recommendation, saying that while the company’s valuation was “optically low”, earnings visibility was “clearly non-existent” and the continuous decline in Asos’ gross margin showed no sign of stopping.

Insiders appeared to disagree with this assessment of the retailer’s prospects, with chair Ian Dyson spending almost £50,000 on topping up his stake in the company last week. At the same time, non-executive directors Jørgen Lindemann and Patrick Kennedy joined in the spree, buying £490,000 and £240,000-worth of shares, respectively. 

Lindemann’s hefty purchase comes ahead of his own expected rise to the position of board chair in August, when Dyson is due to step down. Asos is reshuffling its management, promoting former chief commercial officer José Antonio Ramos Calamonte to chief executive.

The directors’ purchases restored a degree of confidence among investors: the shares rose by 13 per cent on 17 June, the day on which the buys were disclosed.

 

Buys    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
Alphawave IPSehat Sutardja *10-16 Jun 221472,331,875
AsosJørgen Lindemann (ch-d)16 Jun 22854490,277
AsosPatrick Kennedy16 Jun 22810242,895
AvevaCaspar Herzberg (PDMR)10-13 Jun 222,40696,220
Cloudbreak DiscoverySamuel Hardy (ch/ce) *15 Jun 22375,000
EnQuestAmjad Bseisu (ce) *09-1 Jun 2228448,224
First TinThomas Buenger (ce)10 Jun 2219 †93,969 †
HalmaTony Rice16 Jun 221,92258,847
Johnson MattheyDr Jane Griffiths10 Jun 222,05151,269
JTCIain Johns (PDMR)14 Jun 2263378,620
Literacy CapitalChristopher Sellers10-14 Jun 22401200,500
LondonMetric PropertyAlistair Elliot16 Jun 22236118,000
M&GKathryn McLeland (cfo)17 Jun 22198248,748
Marston'sNick Varney *7-10 Jun 225783,931
NeometalsChristopher Reed (ce)14 Jun 22 57 †57,277 †
NextMichael Roney (ch) *16 Jun 225,710171,299
Ocean WilsonsAndrey Berzins13 Jun 2296477,125
Peel HuntSteven Fine (ce)17 Jun 22112112,000
Peel HuntSunil Dhal (cfo / coo)17 Jun 22112112,000
QuilterGlyn Barker10 Jun 2211299,254
SSP GroupPatrick Coveney (ce)14 Jun 22229114,255
WorkspaceStephen Hubbard (ch)13 Jun 22649115,911
WorkspaceNick Mackenzie13 Jun 22636

78,864

 

Sells    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
FRP AdvisoryGeoff Rowley (ce) **15 Jun 221402,647,306
FRP AdvisoryJeremy French (coo) **15 Jun 221402,117,844
Hargreaves Services Roger McDowell (ch)10 Jun 22568113,600
InvestecMarc Khan *17 Jun 22450337,245
Jubilee MetalsDr Mathews Phosa09 Jun 2215225,000
Kosmos EnergyRoy A. Franklin13 Jun 22585 †121,310 †
SercoMark Irwin (PDMR)10 Jun 22183337,122
Strategic Equity CapitalRichard Hills (ch)15 Jun 2229294,899
*Spouse/Family/Close Associate. ** placing / open offer  † Converted from € / $ / A$