N Brown grows sales, beats profits forecast

N Brown, the plus-size clothing specialist, reported a solid increase in sales and underlying profits in the face of a gloomy UK retail market, though the bottom line was hit by customer redress for historic problems with its credit arm.

For the 52 weeks to 3 March, total sales of £922.2m swelled 3.9% as product sales grew 4.1% to £652m, though on a 53-week basis was only up 2.6%. Product sales climbed 7.5% in the first half but slowed to 0.9% in the second.

N Brown's 'power brands' grew sales 8%, with JD Williams revenues up 3.2% despite being held back a lot by migrating its 'Fifty Plus' customers, Simply Be jumped 16.3% and the men's brand Jacamo grew 5.1%.

The shift online, a key priority of chief executive Angela Spindler, saw almost three quarters of revenues arrive over the internet, with online penetration climbing four percentage points to 73% and online revenue up 10% year on year, 17% for the power brands.

"Against a challenging market backdrop I am delighted to be reporting profit growth," Spindler said, noting that the second half was difficult for the fashion sector as a whole.

"A good performance in Financial Services provided the group with resiliency to enable us to continue to invest in our customer offer, successfully driving revenue and market share growth."

Financial services, the customer credit line, generated income of £269.6m, which was was flat on a 53-week basis but up 3.5% on the prior 52-week financial year.

Profit before tax of £16.2m at the statutory level collapsed 72% on the previous year due to total exceptional costs of £56.9m.

Excluding this, the underlying business was solid, with adjusted PBT of £81.6m versus a 53-week comparison of £82.6m, or up 1.3% on the previous year but beating the consensus forecast of £79.5m.

Earnings per share of 23.1p was up very slightly on the 22.74p 53 week comparator and up 4% on the last year. A final dividend per share of 8.56p was proposed, the retailer's fifth straight year, making for a full-year payment of 14.23p and so a dividend yield of 7.3%.

Spindler highlighted the group grew market share in the UK, grew revenue from the USA 21% on a constant currency basis in the second half, and recently launched the 'Global Ship Anywhere' plan.

"March was a challenging month for fashion retail, however, trade is improving through April, and at this early stage in the new financial year our overall expectations are unchanged."