N Brown swings to profit with online retail focus

Clothing retail conglomerate N Brown Group plc (LON: BWNG) shares bounced on Thursday following the publication of its half-year results, which revealed a positive turnaround in the Company’s fundamentals.

The Group, which owns Jacamo, Simply Be and JD Williams, saw its profits surge on the back of a hike in online sales, which now comprise 84% of product revenue.

Despite a 5.4% contraction in Group revenue, the Company swung from a £23.8 million loss to a £14.7 million profit, in a year-on-year comparison of the six month period ended 31 August. Similarly, adjusted EBITDA rose 4.0% to £54.1 million and adjusted profit before tax grew 3.9% to £38.1 million.

N Brown shareholders also enjoyed some progress, with adjusted EPS bouncing 6.0% to 8.87p, while the Group’s interim dividend for the period remained flat at 2.83%.

N Brown comments

Steve Johnson, Chief Executive, 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 focussed on implementing our plans and the Board’s full year expectations are unchanged.”

Investor notes

Following the announcement, the Company’s shares have rallied 9.10% or 9.10p to 109.10p per share 10/10/19 14:18 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on N Brown stock, the Group’s p/e ratio stands at 4.68 and their dividend yield is enticing at 6.59%.

Elsewhere in retail and on the highstreet, there have been updates from; ScS Group PLC (LON: SCS), McColl’s Retail Group PLC (LON: MCLS), Boohoo Group PLC (LON: BOO), Burberry Group plc (LON: BRBY), Associated British Foods plc (LON: ABF), H&M (STO: HM-B) and Sports Direct International Plc (LON: SPD).