9th Oct 2013 07:58
LONDON (Alliance News) - British home-shopping business N Brown Group PLC Wednesday reported higher profits in the first half of the year, boosted by strong sales growth and customer order numbers.
The Manchester-based internet and catalogue home shopping company said it has seen a strong start to the second half of the year, with like-for-like sales for the five weeks to October 5, up 8%.
N Brown said that it is confident in delivering a strong performance for the full year, and as a result increased its interim dividend by 4% to 5.67 pence per share.
N Brown reported a 8% rise in first-half revenues to GBP409.6 million, compared with GBP379.3 million a year earlier, boosted by its investment in customer recruitment, as customer order numbers rose by 4.3% to over four million, and sales per customer also increased.
It said that excluding newly opened stores, like-for-like sales increased by 7.8% in the first half.
It also reported an increase in its pretax profit of GBP44.1 million, from GBP41.8 million a year earlier- after incorporating a total loss of GBP2.4 million from its Simply Be stores, and its US Simply Be business.
N Brown said that overall gross margins reduced by 80 basis points to 52.5%, as continued customer recruitment increased its bad debt. However, it said that more planned cost savings and tight control of overheads compensated for this.
The group said that in the first half it benefited from strong internet penetration, and strong growth from new and younger customers. It said its specialist brands and its homeware and lifestyle categories also fared well. It also said that its core mature-female brand, JD Williams resumed growth.
N Brown said that internet sales rose 13%, and accounted for 56% of home shopping sales in the first half, while mobile accounted for 36% of web traffic. It said that as a result, it has continued to reduce its paper-based marketing activity, which has save GBP1.5 million in costs in the year to date.
N Brown said that all of its product categories experienced growth and improved product margin, despite a movement in mix, which favoured lower margin home and leisure categories, which grew by 14%. It said that footwear sales grew by 16%, ladieswear grew by 3%, and menswear by 6%.
The retailer said that it is now looking to focus internationally on the US market, after holding back on the level of customer recruitment activity to evaluate its performance in the first half of the year.
It also said that it will take advantage of its market position in the plus size and mature fashion retail arena in the second half of the year.
"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," said Chief Executive Officer Angela Spindler in a statement.
N Brown shares were down 2.8% Wednesday morning, trading at 501.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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