N Brown Group shares surged 28.6% to 33.9p on the back of the fashion group’s pre-tax profit spike of 108.7% to £19.2 million in its 2022 results, against £9.2 million the previous year.
N Brown Group highlighted an adjusted EBITDA growth of 11.9% to £95 million compared to 84.9 million, alongside an adjusted EBITDA margin increase of 1.7% to 13.3% against 11.6%.
The company reported a revenue slip of 1.8% to £715 million from £728.8 million, as a result of its 0.6% decline in product revenue and a 4% reduction in Financial Services revenue due to a smaller debtor book at the start of the financial year.
The firm also noted an operating costs decline as a percentage of revenue to 36% against 39.8% at pre-pandemic levels in 2020 in light of increased efficiencies and retained cost flexibility.
N Brown Group confirmed a strong balance sheet with unsecured net cash of £43.1 million, alongside an additional £60.1 million in accessible cash voluntarily undrawn on the securitisation funding facility at the year end.
The group added that it expected a 7% revenue growth with a 13% EBITDA margin in the medium-term, and remained confident in its outlook despite inflationary pressures and shifts in consumer behaviour.
“In what has been another volatile period in the consumer environment, I would like to thank all of my colleagues for their continued commitment to serving customers, and their role in delivering a strong performance in the year,” said N Brown Group CEO Steve Johnson.
“The work we have done means we are significantly better placed than we were before the pandemic and, although cautious in the short-term due to inflationary impacts and consumer behaviour, we remain confident that over the medium-term our strategy will support the delivery of 7% product revenue growth with a 13% EBITDA margin.”
The fashion company announced that it would consider the introduction of a dividend payment in FY 2023.
The firm also commented that it would be moving its focus to boost growth in its most promising brands, such as its recent sustainable clothing brand with JD Williams, in a bid to capitalise on its popular offerings as inflationary-related problems kicked off.
“I am pleased with our continued progress in transforming N Brown into a more focused digital business, with a distinct and improving offer across our strategic brands,” said Johnson.
“Our strategic brands returned to growth in the year with growing customer numbers. As we move forward, we are evolving our priorities to concentrate our growth focus on Simply Be, JD Williams and Jacamo, where we see the strongest market potential.”
“We’re executing on our investment plans to unlock these opportunities including through new websites which will be rolled out progressively over the coming months.”
