10th Oct 2019 08:55
(Alliance News) - N Brown Group PLC on Thursday said it swung to first half profit on lower exceptional costs though revenue was hit by a fall in retail sales, following trends seen in some of its retailing peers in recent months.
In the 26 weeks to August 31, the owner of the Simply Be and Jacamo clothing brands reported a year-on-year revenue decrease of 5.4% to GBP432.9 million from GBP457.8 million.
N Brown did however swing to a pretax profit of GBP18.8 million from a GBP27.1 million loss a year before, with exceptional items being trimmed by 62% to GBP25.0 million from GBP65.4 million.
The first-half exceptional items were generated solely from payment protection insurance redress. In September, the retailer became the latest UK provider of financial services - via its store card - to warn on the legacy issue, recording an additional charge due to a significant jump in claims prior to the deadline. The extra GBP25.0 million was on top of a GBP22.6 million provision it set aside in the second half of last year.
N Brown on Thursday reported an improvement in its financial services business - which allows customers to spread the cost of shopping. Revenue rose in the first half by 2.9% to GBP150.6 million from GBP146.4 million last year.
Product revenue, from N Brown's retail business, slumped by 9.3% to GBP282.3 million from GBP311.4 million. N Brown warned that a no-deal Brexit could further hamper consumer confidence.
N Brown said revenue grew in menswear brand Jacamo during the interim period, but womenswear revenue declined, falls in the JD Williams and Ambrose Wilson units more than offset gains made in Simply Be.
The firm's drive for digital is continuing however. It accounted for 84% of product revenue in the first half, up from 80% last year.
N Brown held its first half dividend of 2.83 pence per share
Looking ahead, the company's will focus its UK business around its four core retail brands. N Brown ramped up investment in both womenswear and menswear, aiming to boost interest through television and social media. Its full-year expectations are unchanged, it said.
It also recently closed its international division and exited marketing directly to the US, "removing an unprofitable part of the business".
N Brown explained: "This has enabled us to re-deploy key skills to support the UK business. We now have a clear and single minded focus on the UK."
Chief Executive Steve Johnson added: "We have delivered on our strategy of growing digital revenue across Simply Be, JD Williams, Jacamo and Ambrose Wilson. This has been achieved by taking a more targeted approach to marketing and customer recruitment. The retail environment remains heavily promotional, but we are concentrating on continuing to improve our customer proposition and ensuring we operate as efficiently as possible."
Shares in the company were 6.8% higher at 106.80p each in London on Thursday morning.
By Eric Cunha; [email protected]
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