FTSE 250 movers: Moneysupermarket tanks; ASOS back in fashion

(Sharecast News) - The FTSE 250 was down 1% to 17,349.87 at 1540 BST.

Amazon has announced the launch of a new home insurance comparison portal, sending shares in London-listed price comparison website Moneysupermarket tumbling.

Amazon Insurance Store will start rolling out to select customers on Wednesday and will be available to all UK customers on the company's website and mobile app by the end of the year.

Jonathan Feifs, general manager of Amazon's European Payment Products, said: "Shopping online for home insurance is a well-established experience, and our goal is to exceed customers' expectations when it comes to the Amazon Insurance Store.

"This initial launch is just the beginning - we'll continue to innovate and make refinements, all with the aim of delighting customers and providing the most convenient shopping experience possible."

Amazon has partnered with three insurance brands for the initial launch: Ageas UK, Co-op, and LV= General Insurance. The company plans to add more insurers early next year.

Online fashion retailer ASOS bucked the trend and gained 11% as it said it would post a first-half loss driven by price reductions adding that it would review its business model after finishing its fiscal year in the red.

ASOS posted a pre-tax loss of £32m from a profit of £177m and said trading at the start of the new fiscal year had been volatile. On an adjusted basis profits fell to £22m in the 12 months to August 31 2022, in line with recently lowered guidance and down from £193.6m last year when consumers turned to online purchases during Covid pandemic lockdowns.

The company on Wednesday said it was writing off up to £130m in excess stock after building inventory to cope with supply chain constraints. Customer returns have also increased as consumers feel the impact of soaring inflation, which on Wednesday hit an annual rate of 10.1%.

It guided for a loss in the first half driven by "elevated" markdown to clear stock resulting from the change in commercial model, but expected a fall in freight rates and cost mitigations to mostly benefit the second half.

New chief executive José Antonio Ramos Calamonte said there was a "significant need to improve the way we operate to unlock the opportunity of our global reach".

"In recent years, the quest for growth has resulted in ASOS becoming excessively capital intensive, too complex and overstretched globally, which has resulted in a lack of meaningful growth and scale in its key international markets of the US, France and Germany."

The company said it had agreed a £650m banking facility to give it "financial flexibility" and outlined plans to cut costs and improve stock management. It is also considering selling via other websites in overseas markets or sharing warehouse space with others.

Sales for the full year were flat at £3.94bn. Revenue in the UK was up 7%, the US 10% and 2% in Europe but sank 9% in other markets.

Shares in the business surged in early trade after a plunge on Monday after it confirmed it was in talks with lenders over changing the terms of a £350m borrowing facility.

"Yes, the company has posted a loss, but sales have held up reasonably well all things considered. The problem for ASOS is the current crisis has revealed flaws in its business model, including some thin operating margins," said AJ Bell investment director Russ Mould.

"The online retail sector didn't have to worry as much about the costly exercise of returns during the pandemic as people were reluctant to head to a busy post office to send a parcel back. At the same time, many weren't watching the pennies as they are now and were perhaps happy to stick with a jumper that didn't fit quite right."

"That's no longer the case and the outlook for sales is weak. Crucially, recently appointed CEO José Antonio Ramos Calamonte has demonstrated he is taking the challenges in front of the company seriously."

"Some of the things he is looking at, like stock management, are basics of the retail industry and really things ASOS should have already had under control. Costs are being cut and ASOS may have to follow the lead of other retailers and start charging for returns."

"ASOS's current predicament is only adding to longer-term concerns about the whole fast fashion model and whether, in an age when the focus is on sustainability and where sourcing cheap materials and labour is a much bigger challenge, it has as solid a future as previously thought."

Shares in Quilter fell as the fund manager reported "resilient" gross and net flows in its third quarter update on Wednesday, amid a "volatile" market environment.

The FTSE 250 company said assets under management and administration totalled £96.9bn at the end of September - a decline of 2% from 30 June, which the board put down to a "challenging" market backdrop over the summer, with both bond and equity values declining.

Average assets under management and administration for the third quarter came in at £100.1bn, which was 5% lower than the first-half average of £105.3bn.

Net inflows in the quarter totalled £0.2b, down from £1bn year-on-year and £0.3bn in the second quarter.

The company said the third quarter was typically a "seasonally slow" quarter, with that exacerbated by increasing market volatility and cost-of-living pressures, reducing gross flows.

It described a "solid performance" from the Quilter channel, with quarterly gross platform flows of £637m, compared to £654m a year ago, which the directors said demonstrated "constant" Quilter adviser productivity, which was stable at £2.2m.

Quilter channel quarterly net inflows slipped to £430m from £469m on the year, which the board said reflected "moderately higher" levels of redemptions.

The company said it remained "very focussed" on attracting new independent financial adviser firms to its UK platform, and was making "good progress" despite the current market challenges.

It also reported a "resilient performance" from the high net worth segment, with "moderately lower" gross flows and "stable" retention leading to net flows for the quarter of £222m, compared to £329m a year ago.

"While we are living through uncertain times, our business is well positioned to win in the UK wealth market," said chief executive officer Paul Feeney.

"I am pleased that we continue to deliver positive net flows even through the quietest quarter of this unprecedented year.

"The Quilter channel, in particular, has continued to deliver robust flows to our platform and the high net worth segment has continued to deliver a resilient performance."

Feeney said that over the last decade, his focus had been on building a "modern integrated wealth manager" that was "strategically positioned" in the largest, secular growth market in UK financial services.

"I am delighted to be handing on such a business to my successor, Steven [Levin], and I am confident in Quilter's potential and ability to drive growth and deliver efficiency.

"The strength of our advice-based model means we are well positioned to take advantage of the opportunities ahead, even in tough markets."

FTSE 250 - Risers

ASOS (ASC) 545.50p 11.33% RHI Magnesita N.V. (DI) (RHIM) 1,733.00p 6.98% ITV (ITV) 68.82p 4.21% easyJet (EZJ) 335.40p 2.98% Carnival (CCL) 628.80p 2.91% Mitie Group (MTO) 67.90p 2.41% Energean (ENOG) 1,359.00p 2.41% Ascential (ASCL) 203.40p 2.37% Tullow Oil (TLW) 37.64p 2.34% Discoverie Group (DSCV) 739.00p 2.07%

FTSE 250 - Fallers

Moneysupermarket.com Group (MONY) 180.30p -13.81% OSB Group (OSB) 385.60p -5.26% Wetherspoon (J.D.) (JDW) 429.40p -5.08% CLS Holdings (CLI) 131.80p -5.04% ICG Enterprise Trust (ICGT) 990.00p -4.81% Quilter (QLT) 88.98p -4.57% W.A.G Payment Solutions (WPS) 80.00p -4.53% Hochschild Mining (HOC) 58.40p -4.50% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,200.00p -4.35% Safestore Holdings (SAFE) 827.50p -4.34%