Profits spark at N Brown despite sales slide

(Sharecast News) - Online retailer N Brown Group posted strengthened half-year profits and reiterated its full-year outlook on Thursday, despite a "soft" clothing market weighing on sales. The firm, which owns JD Williams, Simply Be and Jacamo, saw group revenues in the 26 weeks to 31 August fall 6.7% to £277.2m. Within that, product revenues slid 8% to £172.7m while financial services sales fell 4.6% to £104.5m.

Adjusted earnings before interest, tax, depreciation and amortisation rose, however, by just over 7% to £18.8m, while pre-tax profits came in at £0.2m.

Last year, the AIM-listed retailer posted pre-tax losses of £2.8m.

N Brown said an improvement in the gross margin, to 49.2%, and cost discipline had helped grow both EBITDA and profits, despite a "soft" clothing market being hit by unseasonable weather.

The 165-year old company - which used to sell exclusively through catalogues before shifting online - said it had made good progress against its strategic objectives during the period, including launching a new JD Williams website.

Total orders decreased by 8% to 3.4m, but N Brown said it was a "significant" improvement against the prior year trajectory.

It also flagged "encouraging" trading in the first five weeks of the third quarter and reiterated its full-year outlook.

Steve Johnson, chief executive, said: "Our focus on maximising profitable sales and managing the cost base in a soft trading environment has ensured we remain on track to achieve management's full-year adjusted EBITDA expectations.

"We have continued to deliver against our self-funded transformational priorities.

"These developments will enhance the customer experience and will be supported by strengthened marketing activity to help position the business for sustainable profitable growth."

As at 1000 BST, shares in N Brown were up 1% at 28.2p.