1st May 2014 08:36
LONDON (Alliance News) - Home shopping company N Brown Group PLC Thursday reported higher pretax profit for its last financial year, driven by double-digit growth in sales of menswear and home products, and it forecast a bigger surge in sales growth from 2016 as it invests in revitalising and expanding its businesses.
The owner of brands including the Figleaves online lingerie store and the plus-size Simply Be brand, reported a pretax profit of GBP97.3 million for the 52 weeks to March 1, up from GBP96.4 million in the 52 weeks to March 2, 2013. Its revenue rose to GBP834.9 million, from GBP784.7 million.
The increase in profit underperformed the revenue increase because the company booked a loss on its fair value adjustments to financial instruments, compared with a gain last year. Its net profit actually fell, to GBP75.9 million, from GBP79.4 million, as its tax bill rose.
Its gross margin also fell 30 basis points as it sold more home and gift products and it ran more sales in the second half of the year. That decline marked an improvement from the 80 basis point fall the company reported in the first half of the financial year.
Still, the company's shares were up 2.9% at 528.00 pence early Thursday, one of the biggest gains on the FTSE 250.
Stockbrokers Shore Capital said the results were in line with its estimates, but it said it thinks the work that the company is doing to grow the company will pay off. It cut its forecasts for N Brown's profits in fiscal 2015 due to the costs of the improvement programmes, but maintained its forecast of growth in fiscal 2016 and said it expects very strong growth in fiscal 2017.
"Looking forward, we forecast the preparatory work already underway to build into very strong growth from N Brown, which underscores our medium term optimism for accelerating growth in both sales and profitability," Shore Capital said.
N Brown, which has former Unilever and Tesco executive Andrew Higginson as its Chairman, is investing heavily in revitalising its online brands to pull in new customers, pushing some of the brands overseas, and is also expanding a portfolio of UK shops to compliment its online offering.
"Going forward the benefits of our strategic initiatives will start to come through as we look to achieve a double digit rate of sales growth during the financial year ending February 2016," Chief Executive Angela Spindler said in a statement.
"We are particularly encouraged by the strong performances from our younger titles, primarily driven by Simply Be and Jacamo, and have continued to focus on revitalising our core brand of JD Williams which remains key to achieving our future growth ambitions," she added.
In terms of brands, the company's mature brands Julipa and House of Bath grew at over 25% on the year, while younger female brand Simply Be grew 9%. Male brand Jacomo grew 21%.
The company raised its final dividend to 8.56 pence, up from 8.23 pence, giving a total dividend of 14.23 pence for the year.
N Brown shares were up 1.4% at 520.00 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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