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(Sharecast News) - Asos shares shot higher on Wednesday after the online fashion retailer completed the sale of a fulfilment centre in Atlanta that was no longer in operation.
The lease has been assigned to a "global consumer brand" and the assets are being bought by a member of the DHL Group, Asos said.
The sale has resulted in net proceeds of around 48m and annual cash cost savings of 6m at current exchange rates. There is also a one-off profit before tax of around 78m at current exchange rates after adjustments to associated property liabilities.
Asos said the net proceeds will add to its cash position of 209.5m as at 1 March. Taking into account the circa 67m net proceeds from the disposal of the Lichfield fulfilment centre and the proceeds from the Atlanta sale, the pro forma net debt position is around 180m, versus net debt of approximately 295m as at 1 March.
Asos said the disposal represents a further step in the programme to strengthen its balance sheet and deliver disciplined capital allocation. It noted that the site was non-operational and was fully written down in prior periods.
The retailer announced in May that it had agreed to sell its Lichfield fulfilment centre to Marks & Spencer. The Lichfield site had already been mothballed to address excess capacity.
Chief executive Jose Antonio Ramos said: "The disposal of Atlanta is another clear demonstration of us delivering on our commitments - strengthening the balance sheet, simplifying the business and maintaining strict discipline in how we allocate capital. Since closing the Atlanta fulfilment centre, we have successfully transitioned to our new US operating model, giving customers access to a broader product assortment from our global inventory.
"The strength of customer engagement gives us confidence in this approach and reinforces the progress we are making as we execute our strategy and reposition Asos for long-term, sustainable growth."
At 0943 BST, the shares were up 11.5% at 321p.
Berenberg, which rates the stock at 'buy' with a 600p price target, said: "In our view, these asset disposals, together with ongoing progress in the commercial model, the refinancing in November 2025 and repayment of the 2026 convertible bonds, put Asos in a good position ahead of its next balance sheet milestone: the 253m convertible bond due in September 2028, which is to be redeemed at 120% of par and has an 11% coupon."
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