ASOS PLC shares rise 9% after it announces plans to ditch AIM

The market seems prepared to overlook supply chain issues that have dogged ASOS PLC (AIM:ASC) lately to laud its plans to move from the junior market to the London Stock Exchange’s main list next month.

It ends a two-decade tenure on AIM where it has vied with rival online retailer Boohoo and drug developer Hutchmed for the top spot in the growth stocks index.

With a valuation of just north of £2.5bn, ASOS will comfortably make it into FTSE250 when it finally graduates.

Inclusion on the LSE’s main list will open up a whole new market for the stock with trackers and funds barred from buying AIM shares now able to invest.

The 9% rise in the price to £24.57 was possibly anticipating this future demand for there was precious little else in the online retailer’s update to warrant that sort of movement.

Earlier, ASOS said it had been hit by supply chain constraints and volatile demand to post 5% sales growth in the four months ended December 31.

Providing a trading double whammy, it said its gross profit margins had decreased by four percentage points over the period as a result of discounting and higher logistics costs.

“The company has maintained guidance but after a slow start to the year, there still remains a lot of work to be done to achieve this.

“While ASOS has made significant technological and infrastructure progress over the last few years, significant cash has been burnt to achieve this and execution has been a source of disappointed historically.”