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Asos Plc, in its bid to fight the cascading effects of the coronavirus outbreak, announced the successful placing of ordinary shares to raise capital. The company highlighted that a total of more than 15 million new ordinary shares were placed by the company in the capital, in a transaction advised by JP Morgan Securities Plc and a host of other investment banking firms in a consortium. The company reported that the deal was done to raise equity capital of around £247 million, with shares being priced at GBX 1560.00 each, which was at a very marginal premium to the price of the stock on the London Stock Exchange market at GBX 1559.50 as at the time of the close of market on 7th April 2020. The company also highlighted that the new capital that has been raised amounts to approximately 18.8 per cent of the company’s total capital, meaning they have had to raise a significant amount of capital in this placing. The company also reported that 95 per cent of the new ordinary shares were allocated to the existing shareholders of the company.
Purpose of this placing and more capital to be raised
It needs to be pointed here that like all other companies in the country, especially from the fashion retail segment, Asos Plc has also been struggling to mitigate the negative impact being inflicted by the Covid-19 outbreak. Just after WH Smith raised approximately £165 million in new equity earlier during the week, Asos reported that the extended lockdown might cause some financial problems to the company, and hence come up with this new placing, which would help the company identify key expense areas to keep the operations going once the lockdown is over and when everything is back to normal. The company is also looking to access the Covid Corporate Facility of the Bank of England and is looking to raise more capital by renegotiating its current revolving credit facility by adding another £60 million to £80 million.
The company had previously updated about its financial performance for the period, in which it stated that the sales had grown approximately by 20 to 25 per cent in the last few weeks since the lockdown began in the United Kingdom.
ASC Stock price performance
Source: Thomson Reuters, on 09-04-2020 before the closing of the London Stock Exchange Market
As at 08:30 A.M. on 9 April 2020 Greenwich Mean Time, at the time of writing this report, Asos Plc's stock on the London Stock Exchange stood at a price of GBX 2125.00, stronger by approximately 6.25 per cent or GBX 125.00, in comparison with the stock price registered on the previous trading day at GBX 2000.00. The market capitalisation of Asos Plc at the time of reporting was estimated to be GBP 1.679 billion in relation to the current share price of the company's stock.
In the last twelve months, after April 09, 2019, when the stock was trading at a price of GBX 3117.96 at the time of market closing, the Asos Plc stock had yielded a negative return of about 31.85 per cent. In the last six months, the stock also yielded a negative valuation return of approximately 11.61 per cent as the stock price of the firm stood at GBX 2404.00 at the time of market closing on October 09, 2019. The company's stock also showed a negative return of about 15.03 per cent in value in the last thirty days after market closing on March 09, 2020, when the stock price was stated to be GBX 2501.00 per share. When this report was being written, the firm's stock beta stood at a value of 2.23.
Performance of the peers
Just like Asos Plc, its competitors are also reeling under the impact of the Covid-19 pandemic impact and have been dealing with significant amounts of revenue losses for the last couple of months. Speciality retail and apparel retail companies had been subjected to huge rent and lease costs prior to the beginning of the outbreak, and hence these businesses were suffering a lot. The following is a brief comparative performance of the peer companies of Asos Plc on the London Stock Exchange Market
Burberry Group Plc (LON:BRBY) Stock price performance
As at 08:35 A.M. on 9 April 2020 Greenwich Mean Time, at the time of writing this report, Burberry Group Plc's stock on the London Stock Exchange stood at a price of GBX 1445.00, stronger by approximately 1.12 per cent or GBX 16.00, in comparison with the stock price registered on the previous trading day at GBX 1429.00. The market capitalisation of Burberry Group Plc at the time of reporting was estimated to be GBP 5.783 billion in relation to the current share price of the company's stock.
The annual dividend of the company’s stock has been reported to be at GBX 42.80, while the annual dividend yield has been reported to be at 3.07 per cent. The company’s last ex-dividend date was on December 19, 2019 and the company’s last dividend was paid out on January 31, 2020. In the last twelve months, after April 09, 2019, when the stock was trading at a price of GBX 1932.50 at the time of market closing, the Burberry Group Plc stock had yielded a negative return of about 25.23 per cent. When this report was being written, the firm's stock beta stood at a value of 1.52.
WH Smith Plc (LON:SMWH) Stock price performance
As at 08:40 A.M. on 9 April 2020 Greenwich Mean Time, at the time of writing this report, WH Smith Plc's stock on the London Stock Exchange stood at a price of GBX 1264.00, stronger by approximately 6.31 per cent or GBX 75.00, in comparison with the stock price registered on the previous trading day at GBX 1189.00. The market capitalisation of WH Smith Plc at the time of reporting was estimated to be GBP 1.368 billion in relation to the current share price of the company's stock.
The annual dividend of the company’s stock has been reported to be at GBX 58.20, while the annual dividend yield has been reported to be at 5.31 per cent. The company’s last ex-dividend date was on January 09, 2020 and the company’s last dividend was paid out on January 30, 2020. In the last twelve months, after April 09, 2019, when the stock was trading at a price of GBX 2115.59 at the time of market closing, the WH Smith Plc stock had yielded a negative return of about 40.25 per cent. When this report was being written, the firm's stock beta stood at a value of 1.50.
Mulberry Group Plc (LON:MUL) Stock price performance
As at 08:45 A.M. on 9 April 2020 Greenwich Mean Time, at the time of writing this report, Mulberry Group Plc's stock on the London Stock Exchange stood at a price of GBX 176.55, weaker by approximately 2.46 per cent or GBX 4.45, in comparison with the stock price registered on the previous trading day at GBX 181.00. The market capitalisation of Mulberry Group Plc at the time of reporting was estimated to be GBP 108.74 million in relation to the current share price of the company's stock.
The annual dividend of the company’s stock has been reported to be at GBX 5.00, while the annual dividend yield has been reported to be at 2.76 per cent. The company’s last ex-dividend date was on October 24, 2019 and the company’s last dividend was paid out on November 21, 2019. In the last twelve months, after April 09, 2019, when the stock was trading at a price of GBX 288.00 at the time of market closing, the Mulberry Group Plc stock had yielded a negative return of about 38.70 per cent. When this report was being written, the firm's stock beta stood at a value of 1.00.
Comparative Stock price chart of BRBY, COA and MUL
Source: Thomson Reuters, on 09-04-2020 before the closing of the London Stock Exchange Market
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