N Brown back in the black as online powers growth

The retailer reported statutory profit before tax of £18.8m for the 26 weeks ending August 31, 2018, up from a £27.1m loss for the 26 weeks to September 1, 2018. Operating profit also rose to £14.7m, up from a £28.3m loss in the previous year.

Group sales fell 5.4% to £432.9m, while product revenues fell 9.3% to £282.3m for the period.

N Brown reported adjusted EBITDA of £54.1m, a 4% increase from the previous year.

The retailer said 84% of its overall sales were driven by ecommerce, while 97.6% of sales were digital for Simply Be, 97.2% for Jacamo, 79.6% for JD Williams and 57.6% for Ambrose Wilson.

The group’s gross product margin fell 190bps to 51.5% in what N Brown said was a “highly promotional market”, while financial services saw a 140bps increase to 57.4%.

Overall net debt increased 14.5% to £481.6m, while core net debt ballooned 121.3% to £67.5m.

Chief executive Steve Johnson said: “We announced our new strategy in May to return N Brown to sustainable profit growth and we have made good progress over the first half of the year.

“In particular, 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, which has led to an increase of 4% in adjusted EBITDA for the period. We remain focused on implementing our plans and the board’s full-year expectations are unchanged.”