N Brown returns to FY statutory profit

Online retailer N Brown Group said on Thursday that it had returned to profit in the year ended 2 March thanks to lower adjustments and a focus on driving profitable sales.

Statutory pre-tax profits soared by £76.4m to £5.3m as the group's effective tax rate was impacted by its low level of pre-tax profit in the year and the value of tax adjustments made to derive taxable profits.

Adjusted underlying earnings margins rose roughly four percentage points from H1 to H2 and, with a full-year margin of 7.9% broadly in line with FY23. Adjusted underlying earnings, on the other hand, fell 12.5% to £47.6m and revenues contracted 9.8% to £600.9m, reflecting "continued challenging market conditions".

Looking ahead, N Brown expects to experience a "gradual improvement" in trading expected through FY25, with the rate of FY24's product revenue decline moderating at the start of FY25, with Q1 declining by 6%.

This improvement was expected to continue as the year progresses, and for FY25 the group anticipates product revenue will return to "a moderate level of growth", alongside "a modest improvement" in the rate of decline in financial services revenue and a group gross margin rate consistent with FY24.

Chief executive Steve Johnson said: "We have delivered against our strategic and financial objectives this year. We have kept to our transformation plans, despite the macro-economic backdrop, whilst building resilience through our strong balance sheet, and achieving adjusted EBITDA above market expectations.

"Looking ahead, our strong liquidity position allows for continued investment in our strategy, positioning the business for sustainable growth whilst always improving the customer experience."

As of 0945 BST, N Brown shares had surged 20.07% to 17.95p.

Reporting by Iain Gilbert at Sharecast.com