N Brown beats forecasts in first half

Sales and profits at internet and catalogue home shopping firm N Brown came in ahead of expectations in the first half, with like-for-like (LFL) sales growth accelerating in the second quarter.

Sales and profits at internet and catalogue home shopping firm N Brown came in ahead of expectations in the first half, with like-for-like (LFL) sales growth accelerating in the second quarter.

Total revenue in the 26 weeks to September 1st came in at £379.3m, up 4.3% on the year and ahead of the consensus estimate of £371.7m.

The company said that revenue growth was largely driven by a combination of those brands targeted at the under-50 customers, strong online trading and a higher level of financial income.

Sales from the under-50 brands increased by 12% to £143m. Internet sales rose 12% to £196m and now account for 53% of home shopping sales, up from 48% last year.

Meanwhile, profit before tax and fair value adjustments fell by 4.5% to £42.0m, still ahead of the £40.6m forecast. Earnings per share of 12.5p beat the 11.1p consensus prediction.

"I am delighted that the revenue and gross margin trends have been on an upward trajectory throughout 2012.We have seen double digit growth in the revenue from our younger brands, such as Jacamo and Simply Be, and in our menswear and home and leisure product ranges," said Chief Executive Alan White.

"The 10.1% increase in sales at the start of the second half is also very encouraging and all our major brands and product areas have contributed to this growth. This gives us some optimism in the outlook for our second half performance."

The gross margin fell by 1.6 percentage points to 53.3% due to the product, customer and channel mix, the group said.

N Brown has declared and approved an interim dividend of 5.45p per share, up from 5.29p at the same time last year. This will be paid in January 2013.

LFL sales accelerate

At the 17-week stage, LFL sales were up 1.9%, but this increased to 3.7% by the half-year stage. Equity analyst Joe Spooner from Jefferies said that this suggests LFL growth of around 7% over the final nine weeks of the period.

Jefferies reiterated its 'buy' rating on the stock this morning, saying that the business is well-placed for the second half and beyond.

Spooner said: "We expect the market to favourably focus on accelerating LFL sales since the July update in the 1H13 results. But we'd also highlight the return to growth in the active established customer base as positive for the longer term outlook."

Recommended

The top funds to invest in
Funds

The top funds to invest in

Investors continue to favour passive funds in April though figures reveal an actively managed money market fund also caught their eye. We look at wher…
3 May 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
20 Apr 2023
Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
28 Mar 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023

Most Popular

June’s NS&I Premium Bond prize draw - are you this month’s millionaire?
Savings

June’s NS&I Premium Bond prize draw - are you this month’s millionaire?

Two fortunate NS&I Premium Bond winners are now millionaires. Find out here if you’re one of them.
1 Jun 2023
The best one-year fixed savings accounts - June 2023
Savings

The best one-year fixed savings accounts - June 2023

You can now earn 5% on 1 year fixed savings accounts - the best rate seen in 14 years. We have all the latest rates available now.
2 Jun 2023
The top healthcare funds to buy
Investments

The top healthcare funds to buy

Increasingly rapid progress in drugs and healthcare technology makes these trusts top tips, says Max King.
1 Jun 2023