ASOS (LON:ASC) has raised £247 million through a placing to help strengthen the groups balance sheet in the midst of the coronavirus crisis.
ASOS shares rose over 30% following the announcement of the successful placing conducted by JP Morgan as the market rewarded the company’s nimbleness.
ASOS are the first company to conduct a significant share sale in the coronavirus crisis.
The rise in ASOS shares also comes after the online retail company released first half results demonstrating strong sales, before the onset of the coronavirus lockdown.
ASOS revenue grew by 21% to £1.59 billion from £1.34 billion the year prior, in the six months to 28th February.
The strong sales were a result of a push into social media driving higher customer retention and acquisition.
However, the company said it has been adversely impacted by the spread of coronavirus and saw sales down in the region of 20-25% in the period since the end of the half year.
“ASOS had a strong start to the year, making significant progress against the priorities we set out and delivering a better than anticipated first-half performance, driven by the operational improvements we are making to the business.
“Along with other businesses, we have been significantly impacted by the COVID-19 outbreak. Our first priority was to quickly put in place the necessary measures to ensure the health and wellbeing of our people. I have been extremely impressed with the pace of change and the flexibility our teams have shown in adopting these new ways of working. I’d like to thank them all for the way they have responded.”
“Since then, we have been focused on keeping our business delivering for customers whilst implementing a series of actions to mitigate the sales impact we have been experiencing. At the same time we have been working to strengthen our financial position, including reaching agreement with our lenders to provide us with additional short-term financial flexibility.”
Mr Beighton continued to explain how customer loyalty will provide ASOS with a steady demand through coronavirus, albeit reduced.
“The ASOS business model provides us with significant resilience and we are encouraged to have seen, across our markets, that where consumers are in lockdown, ASOS continues to be an important part of their lives. We have a global platform with the capacity and capability to drive our future growth as demand returns and against that backdrop we are looking to raise incremental equity capital to ensure we have sufficient resources to capitalise on the future whatever it may hold,” he said.
“The COVID crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focussed on making sure that ASOS emerges as a stronger and better business.”
ASOS shares were up 33% to 2,085p in early trade on Wednesday.