9th Oct 2013 06:39
LONDON (Alliance News) - N Brown Group plc (BWNG.L), an online, catalogue and stores retailer, reported Wednesday a higher profit in its first half, benefited by good growth in like-for-like sales. Looking ahead, the company said it expects the second half performance to remain in line with previous expectations, and is confident on its outlook for the full year. Brown also announced higher dividend.
For the 26 weeks ended August 31, the company recorded pre-tax profit of 44.1 million pounds, higher than last year's 41.8 million pounds. Profit before tax and fair value adjustments grew 7.1% to 45 million pounds from last year's 42 million pounds.
Adjusted earnings per share, which excluded certain items, were 12.55 pence, while last year's earnings were 12.48 pence.
Total group revenue in the first half increased 8% to 409.6 million pounds from 379.3 million pounds in the prior year. Excluding newly opened stores, like-for-like sales increased 7.8%.
Brown stated that its revenues have continued to grow well, reflecting the success of sustained investment in customer recruitment, which has been maintained at last year's higher level. Customer order numbers grew 4.3% to over four million and sales per customer have also increased.
In the six months, Internet sales grew 13% and accounted for 56% of home shopping sales, helped by increasing tablet and smartphone use. This has resulted in continued reduction in paper-based marketing activity and has saved 1.5 million pounds in costs in the year to date.
Overall gross margin reduced by 80 basis points to 52.5%, even as product gross margin rose 40 basis points. The company noted that as expected, continued strong customer recruitment has resulted in an increase in bad debt and a lower financial income yield.
Based on the growth in trading profit and reduced gearing, Brown announced a 4% increase in interim dividend to 5.67 pence, covered 2.2 times.
Regarding the current trading, the company noted that overall trading in the five weeks to October 5 has continued to be strong with sales performing well across all consumer segments. Total sales increased 8.2% and like-for-like sales rose 8%.
Chief Executive Angela Spindler said, "As these results demonstrate, the business is performing well, with significant opportunity for growth in the future based around our products, delivery channels and international development."
Brown closed Tuesday's regular trading at 515.50 pence, down 2 pence or 0.39%.
Copyright RTT News/dpa-AFX
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