2nd May 2019 11:27
LONDON (Alliance News) - Fashion and homeware retailer N Brown Group PLC shares spiked Thursday despite sinking to an annual loss as it offered a positive outlook on its continued transformation into an online retailer.
Shares N Brown were up 16% in mid-morning trade at 124.30 pence each.
In the 52 weeks to March 2, the retailer posted a pretax loss of GBP57.5 million compared to a profit of GBP16.2 million in the 52 weeks to March 3 2017.
N Brown booked a GBP145.6 million charge for exceptional items compared to GBP56.9 million in the same period a year before. The sharp rise in exceptional items was attributed to a VAT debtor impairment, legacy customer redress payments, and costs associated with closing its bricks-and-mortar store estate.
N Brown's total revenue was broadly flat at GBP914.4 million. The retailer's Simply Be and Jacamo brands saw revenue growth of 4.4% and 3.9%, respectively, but this was offset by a 2.4% revenue decrease in JD Williams.
"We're pleased to have delivered a solid trading performance for the year, driving a 7.9% increase in adjusted earnings before interest, tax, depreciation and amortization, as we continue our transformation into a digital retailer," said Chief Executive Steve Johnson.
The company proposed a full year dividend of 7.1 pence, 50% lower than the 14.23p distributed the year before.
The retailer's overall net debt increased 35% in the period to GBP467.9 million from GBP346.8 million the year before.
Johnson added: "Encouragingly, we saw digital revenue growth across JD Williams, Simply Be and Jacamo, as we improve our customer offer whilst managing the decline of our legacy offline business. We also benefited from improved use of our promotional spend, a strong financial services performance and a drive to ensure we are operating as efficiently as possible across the business."
Looking forward, N Brown said it will "re-focus its strategy". In financial 2019, N Brown's digital operations accounted for 80% of product revenue, up 7 basis points on the year before. Digital penetration of new customers increased 10 basis points to 91%.
"We will initially focus on our core UK market, simplifying our approach to ensure our brand and product proposition continues to improve and resonate with customers. We will also look to harness data and technology to offer customers more choice and flexibility when shopping with us," said Johnson.
He added: "All of this aims to return N Brown to sustainable profit growth, through a digital, retail-led, customer-centric strategy and at this stage in the new financial year our overall expectations are unchanged. We look forward to the future with confidence."
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