11th Oct 2018 09:25
LONDON (Alliance News) - N Brown Group PLC shares dropped Thursday after the company cut its interim dividend in half and warned on the same treatment to its final dividend.
Shares in the online clothing retailer were trading down 23% at 106.39 pence each early Thursday on the London Main Market.
N Brown proposed an interim dividend of 2.83p per share, 50% down from 5.67p a year before, as exceptional items "have meant that distributions have not been covered by free cash flow".
The company said that while it "understands the importance of dividends to investors", it also intents to reflect the 50% reduction in its final dividend.
For the six months to September 1, N Brown's pretax loss narrowed slightly to GBP27.1 million compared to GBP27.6 million.
Meanwhile, revenue increased 1.0% to GBP457.8 million from GBP453.4 million.
As the company focuses on shifting to a fully online retailer, Online Power Brands revenue increased 8.6% in the half-year while there was a "significant decline in offline sales".
Product revenue decrease by 3.1% to GBP311.4 million from GBP323.5 million a year prior, amid "challenging market conditions" with sales from company's brands Simply Be up 8%, Jacamo up 2.7% and JD Williams down 3.1%.
Meanwhile, Financial Services revenue hiked 13% to GBP146.6 million with the customer loan book up to GBP677.6 million from GBP647.6 million at March.
Chairman Matt Davies said: "Whereas much progress has been made transforming the business into an online retailer, we have not yet achieved the growth in product or international that we would have hoped for and have decided to rebase the dividend to a more sustainable level from which we will seek to grow."
Looking ahead, the retailer expects its operating costs to drop by between 1% to 3% due to "tight cost control" for the full year. In the first half, operating costs stood at GBP196.3 million.
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