Mortgage repayment rates reveal North-South divide

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Mortgage repayment rates reveal North-South divide

New research by estate agents Coulters Property has collated the average house price and salary in every major town and city in the UK to reveal the places where you will need to work the most – or least – to pay off your mortgage if you put down a 15% deposit.

A mortgage is one of, if not the most, important investments most people ever make in their lifetime, and it can sometimes take an entire lifetime to pay it back. Of course, this depends on the value of the property, which is why the most expensive places to buy a home in the UK are also the places it takes the average person the longest to pay their mortgage back.

Coulters took the top 50 towns and cities in the UK by population and used data from the Office for National Statistics (ONS) to determine the average gross hourly rate of pay for all employee jobs in that area, then took the average house prices from each town and city as of August 2020 according to the Land Registry UK House Price index.

With the global pandemic of 2020, more lenders are asking for at least 15% deposit, so Coulters used this figure to calculate the deposit amount an “average house” in each town, city and region would require. An average number was then calculated for the number of hours and working days (based off an average eight hour working day) it would take for each town, city and region to pay off the average mortgage amount.

Data courtesy of Coulters Property.

Coulters’ research has revealed that those that live in the South East, South West or East of the UK are likely to need to work twice the number of hours than their Northern counterparts, ranging from as much as 24,487 days in London to 9,064 in the North East.

This means, on average, Londoners need to work three times the total working days of someone living in the North East to be able to afford their average mortgage amount of £415,785.

In other parts of the UK, it would take 11,734 hours to pay off a mortgage in Wales, 10,005 in Northern Ireland and only 9,283 in Scotland, trailing the list with the second lowest time required to pay off the debt in full. Sunderland topped the list as the area where it is easiest to pay back a mortgage, however, needing 7,905 working hours to cover an an average mortgage of £96,678.

Graph courtesy of Coulters Property.

Mike Fitzgerald, Executive Chairman at Coulters Property, commented on the report’s findings:

“Applying for a mortgage to buy a house is a big investment, and it can take a lifetime to pay the lender back. The length of mortgage repayments are determined by the cost of properties, which are dependent on location, and several other socioeconomic factors.

“We have all heard of the ‘north-south divide’ and this is the case for the property market. Mortgages in the south are considerably higher than mortgages in the north as you can see from our research, which shows it takes homeowners in the South East and South West nearly twice as long to pay off their mortgage compared to the North East”.

888 to beat profit and revenue expectations

Safiya Bashir
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888 to beat profit and revenue expectations

Online gambling firm, 888, has seen a growth in profits and revenues as betting shops remained closed during the pandemic.

The group said today that they will beat profit and revenue expectations for last year thanks to the strong trading through 2019 and into 2020.

In the six months to 30 June, group revenue soared by 37% to $379.1m and pre-tax profits surged by 130% year-on-year to $50.9m.

Chief executive of the group, Itai Pazner, commented: “We are pleased with 888’s trading during the second half of 2020. This performance continues to reflect strong FTD trends in line with the group’s recreational customer focus as well as the structural shift towards online services being seen across several consumer-facing industries. We have continued to prioritise safe gambling and recognise the impact of COVID-19 on the lives of 888’s customers across global markets.

“888 continues to invest in protecting customers and has again increased the volume of interactions with customers initiated by 888’s safer gambling team in order to help prevent gambling related harm. Underpinned by 888’s core strengths as a responsible operator with outstanding technology, the group remains well positioned to deliver further strategic progress.”

Looking forward, the group said they are entering the new year with strong momentum and “remains well-positioned to deliver further progress” but aware of possible headwinds and regulatory uncertainties.

Last year, the group hired Lord Mendelsohn as its new chairman. This was the second Labour Party affiliate to join the a gambling firm in a week. Tom Watson, the former deputy Labour leader, was announced as a senior adviser to Flutter Entertainment, owner of Paddy Power.

888 shares are trading -0.88% at 301,00 (1444GMT).

Trading in a volatile stock market

UK Investor Magazine
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Trading in a volatile stock market

This year is all set to be a very volatile one for the stock markets. The stock market is trading near record highs but it’s not in sync with the economy. Though vaccines will be rolled out at a large scale in the next few months, macro indicators remain weak and it is safe to say that traders can expect a lot of movement in the markets.

A volatile market means a lot of price fluctuation that gives traders the opportunity to make higher than usual profits. However, as volatility increases, so does the risk of incurring a loss. Here are four steps to keep in mind while trading volatile markets so that you can maximize profits and minimize losses.

The smart choice to make in volatile markets is to only choose stocks that are trending. Often, a lot of stocks move at a steady pace irrespective of market volatility. You want to avoid those stocks. If the stock is upwardly volatile, hunt for stocks that are trending up. If you are a short-seller in a volatile market, hunt for stocks that are declining but haven’t totally collapsed. There are a couple of factors that you can look out for before trading in these stocks.

Volume

Choose stocks that have large trading volumes. The larger the volume, the easier it is for you to enter and exit stocks. The worst error you can make is getting stuck in a stock that no other party wants to buy or sell. For example, you can use a stock filter to narrow your vision to 10 stocks that trade between £10 and £50 and have over a million trades for the last 100 days.

Average Movement

You can use a stock filter to filter stocks that have moved over 2.5% daily between the open and close of the market (in either direction) for the last three months.

Often, indices report daily gainers and losers. An easy way to identify volatile stocks is to manually go through this list and figure out which stocks make regular appearances on this list.

Keep an eye out for ‘breakout’ levels

A lot of expert traders use the ‘breakout’ rule for trading in volatile markets. The rule is very simple: Keep an eye out for stocks that are establishing strong support levels and are trading within an effective range. If the stock continues to trade in that range, no action is taken on that stock. However, if the stock breaks out or crosses the upper/lower range, traders buy the stock because it could zoom up/down and create a new range.

During normal trading days, there is a danger that once a stock breaks out, it can lose momentum and slide back into the previous range. In a volatile market, that usually doesn’t happen. Stocks in a volatile market almost always create a new range and move up or down. One thing you have to make sure of is that your break out range is wider than normal.

However, in a volatile market, if a stock creates a false breakout level, the price decline can be huge, sudden and severe. If that happens, there is a danger of a huge loss. It is important to keep a strict stop-limit order so that you can cut your losses.

Place limit orders, not market orders

Markets don’t move in a normal or traditional sense during volatile days. Traders need to ensure they leverage various stock order types to ensure they are focused and disciplined while executing a trade. 

So, a market order is an order that lets you buy or sell stock at the current price in the market. For example, Lloyd Bank is trading at £36.74. If you place a buy market order, it will execute the trade at £36.74 during normal times. However, during volatile markets, this could change to £34 or £39 because prices fluctuate wildly in these kinds of markets. 

When you place limit orders, your orders only get executed at those prices. For example, if you place a buy order at a limit of £36.74, your broker will execute that order only if the price is £36.74. If the price is over the number, it won’t be executed. However, there is a chance that you might lose out on a good stock because it didn’t hit your limit.

Only deal in short-term strategies

Volatile markets have a great way of lulling you into a comfort zone. This could mean that you might think it is sensible to hold on to a stock for longer than usual. For example, in a regular market, if a stock breaks out, a trader can afford to have a higher price target for the stock before selling it. However, in a volatile market, you have to book your profits quickly.

  1. You have to set a target or a certain percentage when you will sell your stock.
  2. If you don’t want to sell your whole position, sell a large part of your position (maybe recoup your principal) and hold the remaining stock to generate more upside.

In a nutshell, understand that the market can change suddenly and be prepared to react when it happens.

Why it matters that Trump is impeached – again

Bronte Carvalho
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Why it matters that Trump is impeached – again

Twitter was uncharacteristically quiet on Donald Trump‘s end yesterday after it was announced that he is now the first US President in history to be impeached twice, and having been suspended from his social media accounts, this time there was no platform for him to express his disapproval of the charge of “incitement of insurrection”.

Last week marked a historic moment for the US after a violent mob of Trump supporters stormed the Capitol on 6 January, echoing the President’s false claims that the 2020 election was “stolen” from him. Five people were killed in the riots and Congress – which was in the process of confirming the electoral college vote count to formalise President-elect Joe Biden’s victory – was evacuated and the building locked down as armed security fought to protect lawmakers.

Scenes from the attack have gradually emerged across social media in recent days, capturing the vandalism and looting of the rioters, who were able to breach police parameters despite the use of metal barricades, tear gas and paper spray. The “protestors” – whom Joe Biden and many others have argued should instead be labelled “domestic terrorists” – scaled walls and smashed windows to gain access to the House chamber, where the electoral college vote was taking place.

While Trump was not directly involved in the riots, the President has received global condemnation for his inflammatory rhetoric in the aftermath of the 2020 election and in the lead-up to the attack itself, repeating unfounded claims of “voter fraud” resulting in the election being “stolen from him”, despite the fact that Biden won a conclusive victory with more than 7 million public votes and more than 70 electoral college votes.

Trump himself urged spectators at his “Save America” rally on the morning of the 6 January to storm the Capitol, “fight like hell” and “take back our country”, while the President’s lawyer Rudy Giuliani pushed for “trial by combat” and Donald Trump Jr. echoed previous calls for “total war”.

Almost immediately after the January 6 riots, US Democrats announced their intention to launch a second impeachment process – following the first early in 2020, for which he was ultimately acquitted for “abuse of power” and “obstruction of Congress” after a private telephone call was leaked of the President’s suspect conversation with Ukrainian President Volodymyr Zelensky – marking the first time in US history that a President has faced impeachment charges twice.

Although he is due to leave office next week on 20 January, efforts to charge Trump are more than just a knee-jerk reaction to the violence of last week’s attack. Impeachment – if it passes the Senate, where a 100-member body will sit as a jury presided over by the chief justice of the US Supreme Court – would make life very difficult for Trump once he completes his term.

There is a common misconception that being charged with impeachment means that a sitting US President can be removed from office, but this is not true. Impeachment is not a criminal charge, but a political one, and refers only to the House of Representatives (the lower chamber of Congress) concluding that a president engaged in a “high crime or misdemeanour”. It does not actually equate to a criminal offence, which is why an impeached president can continue to stay in power even if he is “charged”.

Trump’s last impeachment charges were ultimately acquitted by the Senate – which the Republican party held a majority in at the time – which meant he did not incur any significant political or criminal consequences for his infamous phone call, but the upcoming trial on Trump’s responsibility for the Capitol riots represents a fresh threat that the charge could actually go through.

During the last impeachment trial, the House of Representatives impeached Trump the first time without a single Republican vote, but this time 10 members of Trump’s own party broke ranks to support the move.

Liz Cheney, the third-ranking Republican in the chamber and the daughter of former Vice-President Dick Cheney, had some notably harsh words for the President:

“There has never been a greater betrayal by a president of the United States of his office and his oath to the Constitution,” she wrote in a statement that was frequently referred back to by Democrats during the impeachment debate on Wednesday.

While the trial will most likely not be completed in time for the culmination of Trump’s term next week, if he is convicted, the charges will likely prevent him from running for office again – a risk that Democrats would rather not take when the next election rolls around in 2024.

Trump has previously flouted his intentions to run again, but a successful impeachment charge would probably spark an additional vote from the Senate to rule this out, and potentially open up the field for alternative Republican candidates to take the opportunity which would otherwise have been nabbed by the President.

Brian Kalt, author of “Unable, The Law, Politics, and Limits of Section 4 of the Twenty-Fifth Amendment,” has pointed out that Trump could attempt to run again on a technicality, but it is exceedingly unlikely that he would get enough backing from his party:

“There are people who have argued that. I think, though, as a practical matter, if they’re going to get two-thirds in the Senate against him, it would be a sign that just as a practical matter, he’s lost enough Republican support, that he’d be facing an uphill battle getting the nomination anyway”.

Besides from preventing him from running again, there are other practical arguments for launching a second impeachment trial. Lawyer James Robenalt, and John Dean, former White House counsel for President Richard Nixon, told PolitiFact that the most important reason to impeach him would be that members of Congress “perceive that Trump intends to continue to incite insurrection, which could become an armed insurrection. That threat, or the threat he might use military force at home or abroad as a pretext to stay in power, could cause them to act”.

Similarly, they warned, is the possibility that “Trump might pardon those who engaged in insurrection, or himself, or both. Those kinds of pardons would be unacceptable to the American people, but difficult to litigate in the courts because the pardon power is so broad and unlimited”.

On top of this, a successful impeachment charge would strip Trump of his post-term benefits – including an over $200,000 pension and an extensive lifetime security detail provided by the Secret Services. Under the Former Presidents Act, ex-US leaders are also entitled to a governmental allowance for office space and staff, plus reimbursed travel expenses of up to $1 million annually, as well as a funeral with full honours.

These benefits, however would not extend to a president removed by impeachment.

Additionally, once he leaves office for good, Trump will probably have to face the string of allegations of tax evasion and sexual misconduct that he has been able to evade while in office.

Assuming the impeachment charges are approved by the Senate, Trump could see his post-presidency plans turned completely upside-down, which is precisely what the Democrats – and an increasingly growing pool of Republicans – are aiming for.

Taylor Wimpey shares climb on trade update

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Taylor Wimpey shares climb on trade update

Shares at British homebuilding firm Taylor Wimpey (LON:TW) have climbed a modest 1% after the company released an optimistic trading update for the year ending 31 December 2020, citing a “healthy sales rate” and “strong demand” for its resilient performance during the Covid-19 pandemic.

Wimpey announced that it has started 2021 with an “excellent” order book following a strong recovery in sales and production in the second half of 2020 once initial lockdown measures were lifted to allow construction and relocating to resume. It ended 2020 with a total order book valued at £2.68bn or 10,685 homes, up 23% on the previous year-end.

Total UK home completions (including joint ventures) decreased by 39% to 9,609 however, due “primarily to the impact on production capacity during the second quarter shutdown”, and the company was only able to deliver 1,904 homes during the second quarter, down 3% year-on-year.

Its net private reservation rate for 2020 was 0.76 homes per outlet per week, compared to 0.96 in 2019, and cancellation rates for the full year were 5% above normal levels at 20% – although they normalised in the final quarter to 16%.

Average selling prices on private completions increased by 6% to £323k – compared to £305k in 2019 – with the overall average selling price increasing 7% to £288k.

Wimpey’s net cash at the year-end was £719m, with the homebuilder stating that it will restart dividends with a final 2020 payment, and will consider a “special dividend” for 2021. It expects to meet consensus operating profit expectation for 2020 of £293m, and reassured that it has not yet experienced any significant supply chain issues as a result of Brexit.

In a statement, the company said:

“Throughout 2020 we were encouraged by the continued resilience of the UK housing market, underpinned by low interest rates and strong customer demand, and despite the further lockdown in January 2021, interest levels remain good. We enter the year more than 50% forward sold for 2021 private completions.

“Whilst there remains some economic uncertainty given the COVID-19 pandemic and Brexit, the outlook for the UK housing market remains robust. We start 2021 in an excellent financial position, with a strong order book and a clear focus on cost and efficiency. We remain confident of achieving our medium term operating margin target of 21-22% and are well placed to deliver strong and reliable returns for our stakeholders”.

Shares at Taylor Wimpey rose 1.58% to 163.55p at GMT 10:39 on Thursday, extending recent gains of +35.81% in the past 3 months despite a sharp drop during the first UK lockdown when construction was suspended.

Whitbread shares up on “resilient” performance

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Whitbread shares up on “resilient” performance

Shares at British hoteliers Whitbread plc (LON:WTB) have bounced more than 3% after the company released its Q3 FY2021 trading update, citing “resilient operational performance” despite sales down 66.4% and occupancy at a mere 31.1% for the 5 weeks leading up to 31 December 2020.

The company behind Premier Inn lamented the “very challenging hotel market conditions” as a result of the UK government’s lockdown restrictions – reimposed in November and late December as well as again at the beginning of January 2021 – which resulted in a steep fall in demand.

However, Whitbread noted an “improved demand” for business and some leisure travel which enabled the majority of its UK hotels to remain open during the first half of December, and noted that around two-thirds of its hotels are still currently open (although all its restaurants are closed according to lockdown restrictions).

Occupancy levels at Premier Inn sites reached 58% in September – driven by “relatively strong leisure demand in tourist locations and business demand recovering from a very low base” – but plummeted to just 35% in November on the announcement of a second national lockdown. Demand remained stronger in the regions throughout the quarter, however, with demand in metropolitan areas – and London in particular – remaining “weak”.

On average, 82% of Whitbread’s restaurants were open during the quarter, but total food and beverage sales were 53.9% lower year-on-year, as a result of both national lockdowns and tier restrictions forcing restaurants closures and limiting takeaway capacity.

The company went ahead with completing the restructure of its hotel and restaurant operations teams over Q3, which resulted in around 1,500 staff losing their jobs, although Whitbread notes that this is “less than the maximum number of redundancies previously indicated (6,000)”. However, targeted cost savings were still achieved as a result of “a greater proportion of colleagues accepting a reduction in maximum contracted hours”.

The Group’s balance sheet remains “strong” with a net cash position at 31 December 2020 of approximately £40m – compared to £196.4m at the end of H1 – while capital spend was £98.4m in the four months up to 31 December 2020. It also had cash on deposit of £814.9m and access to a £900m undrawn revolving credit facility, as well as up to £300m available as part of the government’s Covid Corporate Financing Facility (CCFF) scheme.

Total UK sales across its hotels are currently down -73.4%.

Commenting on Whitbread’s update, CEO Alison Brittain said:

“Since the start of the COVID crisis, we have responded quickly and robustly to the changing restrictions and have learnt to rapidly adapt our operations as required. This is testament to the efforts of our colleagues who continue to work tirelessly to maintain our very high operating standards, customer service and high levels of health and safety. This response has enabled us to continue to deliver strong market share gains in the UK, demonstrating the benefits of our strong brand, direct distribution, and our unique operating model. 

“We expect the current travel restrictions in the UK and Germany to remain until at the very least the end of our financial year. With the vaccination programme underway, we look forward to the potential gradual relaxation of restrictions from the Spring, business and leisure confidence returning, and our market recovering over the rest of the year.

“We continue to protect our liquidity through the careful management of our cash position, and to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business. Our strong balance sheet also provides the opportunity to take full advantage of the enhanced structural opportunities that we are already seeing in the market”.

Whitbread shares were up 3.89% to 3,179.00p at GMT 10:13 on Wednesday as shareholders likely expected the company’s results to emerge worse. The stock has slipped -24.38% over the past 12 months.

AB Foods warns £1bn loss if Primark stays shut

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AB Foods warns £1bn loss if Primark stays shut

London-based retailers Associated British Foods (LON:ABF) has warned that it expects to lose £1.05bn if Primark stores are not allowed to reopen before the end of the financial half-year next month. Currently 305 stores are closed, representing 76% of ABF’s retail selling space.

On Thursday the company released a trading update for the 16 weeks up to 2 January 2021, estimating a 30% drop in total retail sales due to widespread store closures costing the brand around £540m, although ABF did state that “trading was strong given the circumstances”.

Primark’s performance was “materially impacted” by the reimplementation of lockdown restrictions put in place by UK and European governments and the subsequent loss of high street activity – particularly during November and late December – to limit the spread of COVID-19. Overall, sales were 30% lower than last year at constant currency and 28% lower at actual exchange rates.

As a result, ABF announced that its adjusted operating profit for Primark in the first half is forecast to broadly break-even – a stark turnaround compared to £441m for the same period last year – while the group’s net cash before lease liabilities is expected to come in around £500m.

The FTSE 100 company said that it will “partially mitigate” the loss of sales by obtaining savings of 25% of the operating costs of those stores that are currently closed, but warned that ongoing closures could cost a further loss of Primark sales amounting to £800m – with a consequent £300m slash to profits – taking overall costs to an eye-watering £1.05bn.

Shares at ABF dipped slightly on the company’s announcement, down 0.072% to 2,219.40p at GMT 09:44 on Thursday, following a turbulent year which has seen the stock tick down -13.75% over the past 12 months. Festive sales did boost shares +28.38% over the holiday period, but the January lockdown has understandably put a dampener on matters, sending the value down -2.76% once again.

AB Foods currently has a consensus rating on Marketbeat of “buy”, with an average rating score of 2.67 out of 5, based on 10 “buy” ratings, 5 “hold” ratings, and no “sell” ratings.

Halfords shares rise on cycling sales boom

Safiya Bashir
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Halfords shares rise on cycling sales boom

Halfords has posted a 12% growth in sales over Q3, thanks to the boom in cycling over lockdown.

The firm saw a 35% growth in the cycling department, whilst the cycling business Tredz grew by 53%.

Due to tighter restrictions and people staying at home, the group’s motoring sales were down by 8.4%. Halfords, however, said this was a pleasing result given the current climate.

Chief executive Graham Stapleton said that Halfords was playing “an essential role in keeping the UK moving during the pandemic.”

“Throughout the crisis we are privileged to have been able to offer free checks and discounts to 239,000 NHS workers, teachers and Armed Forces staff to help them keep their vehicles safe and roadworthy,” he added in the trading update.

Since November 2019, the group has closed 33 sites and plans to shutter a further 47 stores before the end of the financial year.

The group has remained open as an essential retailer. It has not yet said whether it will return business rates relief but will reveal an update when the “Covid-19 situation becomes clearer”.

Nicholas Hyett, a Hargreaves Lansdown equity analyst, commented on the Halfords update: “The combination of essential retailer status, the roll-out of Halford Mobile Expert and an online offer that finally seems to have got its act together delivered a bumper Christmas for Halfords – the best it’s ever had.

“Looking ahead lockdown 3 is clearly a headwind, since if we’re all staying home fewer cars and bikes will need the kind of minor repairs Halfords specialises in. However we think supply disruption is probably a bigger issue going into the fourth quarter – there’s nothing more frustrating than a sold out sign and lack of product availability could shift customers back towards online competitors.”

Halfords shares (LON: HFD) are trading +4.61% at 290,30 (0946GMT).

Tesco posts 80% rise in online sales

Safiya Bashir
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Tesco posts 80% rise in online sales

Tesco has posted an 8.1% rise in sales for the 6 weeks to 9 January 2021.

As lockdown restrictions tightened over the festive period, the supermarket saw a surge in sales. Over the last nineteen weeks, online sales surged by 80%.

Ken Murphy, Tesco’s chief executive, said: “We delivered a record Christmas across all of our formats and channels. In response to unprecedented demand for online groceries, colleagues delivered over seven million orders containing more than 400 million individual items over the Christmas period.

“We’re now supporting 786,000 vulnerable customers with priority access to online slots and, as lockdown measures continue, we’ll keep doing everything we can to ensure everyone can safely get the food and essentials they need.”

Despite the growth in sales, the supermarket has also estimated a rise in Covid-19 costs from £725m in October to £810m.

Sales in the Tesco Finest range were up by 14%, whilst sales in vegetarian and vegan foods also jumping.

“We supported customers with timely promotions including our festive 5 vegetable offer, ‘3 for 2’ party food and 25% off 6+ bottles of wine. We catered for all diets with our largest ever festive range of free-from, vegan and vegetarian products,” said the supermarket.

“Sales of plant-based products increased strongly including growth of more than +90% in our Plant Chef range in the run up to Christmas. General merchandise sales grew by +4% driven by strong performance in toys, home and electrical items.”

Commenting on the latest Tesco results, Chris Daly, CEO at the Chartered Institute of Marketing, said:

“Tesco has followed its Big Six rivals with strong sales growth over the Christmas period. And while the short term profits from these increased sales will be held back by the costs associated with COVID-19, including establishing its online offer – doubling its delivery slots, and creating thousands of new jobs to meet increased demand – it is better placed to succeed long-term than its competition.

“Tesco has outpaced its rivals when it comes to building brand trust; it was one of the first brands to launch a campaign promoting its social-distancing measures at the start of the Covid pandemic, and pivoted quickly to refresh its popular ‘Food love stories’ towards lockdown inspired tales.

“Tesco’s marketers now have a huge opportunity to leverage their heritage status and the customer loyalty built up during the pandemic to navigate the changing landscape, and sustain a long-term relationship that holds value for customers and shareholders,” he added.

Tesco shares are trading -1.03% at 239,60 (0836GMT).

ASOS raises profit forecast on strong Christmas

Bronte Carvalho
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ASOS raises profit forecast on strong Christmas

On Wednesday, British online fashion retailer ASOS (LON:ASC) reported strong Christmas trading and raised its half-year profit forecast by £40m, which would take its full-year results to the top end of market forecasts, but has warned that post-Brexit tariffs could cost it £15m in the next financial year.

Analysts have forecast a pre-tax profit of between £115-170m, compared to a pre-tax profit of £142.1m in 2019-2020, and ASOS has said that it expects ongoing Covid-19 restrictions to keep online sales high in the first half of 2021. Overall sales grew by 24% to £1.36bn in the four months to 31 December and the company reported an additional 1.1 million new customers over the same period.

The performance was driven by a 36% jump in UK sales alone, which rose to £554.1m, with spending increasingly driven online as lockdown restrictions returned in November and again in the final weeks of the year.

ASOS has left its full-year sales forecast unchanged, but chief executive Nick Beighton explained:

“Looking forward, given the uncertainty associated with the virus and the impact on customers’ lives, our cautious outlook for the second half of the year remains unchanged. However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead”.

“We are really pleased with the strong performance we have delivered, which is testament to both the strength of our multi-brand model and the hard work of our people. We have continued to execute well and deliver for our customers, whilst investing into growing our business and driving further efficiency through a strong operational grip”.

Nevertheless, the impact of Brexit cannot be escaped entirely. ASOS has said that it expects to incur excess costs due to country of origin issues. Although the company has been able to continue selling products on its European websites since the UK left the EU – largely without incurring tariffs because most are shipped from its warehouse in Berlin – there have been some instances where products have not been able to be dispatched from the central Berlin warehouse.

“We’ve not been able to get every product to go direct to Berlin in every single circumstance,” Beighton told Reuters, explaining that ASOS deals with 800 third-party brands as well as its own-brand products.

“Some of the smaller brands have not been able to re-structure to go direct to Berlin rather than Barnsley so there’s still some re-balancing that needs to be done. Over the coming years as they grow we will work to mitigate that cost impact”.

Britain’s Brexit trade deal was billed as preserving its zero-tariff and zero-quota access to the bloc’s single market, but Beighton disagrees with how it has actually turned out: “It isn’t actually a no tariff deal”.

Shares at ASOS were up 3.46% to 5376.00p at GMT 14:58 on Wednesday, extending gains of over 56% in the past twelve months.

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