TIDMBWNG
RNS Number : 0555P
Brown (N.) Group PLC
16 June 2022
16 June 2022
TRADING UPDATE FOR THE 13 WEEKS TO 28 MAY 2022
N Brown Group Plc ("N Brown" or the "Group"), a top 10 UK
clothing & footwear digital retailer, today provides an update
on trading for the 13 weeks ended 28 May 2022 ("Q1 FY23").
Highlights
-- Continued growth in strategic brands product revenue,
reflecting resilient performance against a prior year period which
included lockdown
-- Clothing & Footwear demand driving performance with Home
& Gift remaining soft
-- FY23 Adjusted EBITDA (1) guidance remains unchanged
-- Strong balance sheet maintained
Continued growth in strategic brands
Q1 FY23 Change Q1 FY23 v
Q1 FY22(2)
Product revenue GBP106.3m (0.6)%
----------- -----------------
Strategic brands(3) GBP75.2m 2.5%
----------- -----------------
Heritage brands(4) GBP31.1m (7.2)%
----------- -----------------
Financial Services
revenue GBP58.8m (4.8)%
----------- -----------------
Group revenue GBP165.1m (2.1)%
----------- -----------------
Q1 FY23 has seen continued growth in revenue from strategic
brands against a comparative period last year that covered the
final period of full lockdown in March and early April 2021, which
provided a tailwind to online retail demand. The managed decline in
revenue from heritage brands continued, albeit at a much more
moderate level than previously, as we no longer cycle against the
drag from closing the Figleaves website. The trading environment
has been challenging since the start of FY23, with inflation
impacting consumer confidence, resulting in softer volumes and
revenue than anticipated at the start of the year.
We have grown our share of the online market during the quarter.
Our improved product is resonating with customers including strong
sell through rates on JD Williams' recently launched in-house
designed own brand range, Anise, and growth in demand for Jacamo's
tailoring products. We have experienced further normalisation in
the mix towards Clothing & Footwear, which represented 71% of
product revenue (FY22: 66%), with strong performances in categories
including formalwear and occasionwear, alongside mix-driven higher
return rates. The previously reported softer conditions in the
online home market have continued into FY23, and we expect this to
continue.
Financial Services revenue has declined at a similar level to
FY22. We have seen a greater level of interest from customers in
our credit product during the period as well as further
normalisation of arrears rates.
Strong balance sheet positions us well for the future
As at 28 May 2022 the Group had unsecured net cash of GBP30.8m.
The securitisation facility was voluntarily underdrawn by GBP66.6m
and can be redrawn if required. In addition, the RCF of GBP100.0m
and overdraft of GBP12.5m are both fully undrawn.
FY23 Outlook
Our earnings expectations for FY23 remain unchanged from those
outlined in our Preliminary Results on 18 May 2022, with Adjusted
EBITDA(1) expected to remain at a level similar to that reported in
FY21. The Group remains mindful of the high level of economic
uncertainty and the ongoing impact of this on consumer activity and
operating costs. However, these dynamics are being actively
managed, and the Group will update on trading at the time of its
Interim Results in October.
The Board remains confident that over the medium term our
strategy will support the delivery of 7% product revenue growth
with a 13% EBITDA margin.
Steve Johnson, Chief Executive, said:
" Sales volumes since the start of the financial year have been
softer, reflecting various well-documented pressures on consumer
confidence, which are showing no signs of abating in the short
term. As these pressures persist, we expect the trading environment
to remain challenging and will, therefore, continue to take actions
to mitigate the effects wherever possible.
Despite this uncertain backdrop, our FY23 Adjusted EBITDA
expectations remain in line with previous guidance, as we balance
cost control and our variable cost base with investments in our
technology, our people and in our strategic brands.
The Board remains confident in the Group's strategy and
achieving its medium-term objective of delivering sustainable
profitable growth."
1. Adjusted EBITDA is defined as operating profit, excluding
exceptional items, with depreciation and amortisation added
back.
2. Q1 FY23 is the 13 weeks to 28 May 2022; Q1 FY22 is the 13
weeks to 29 May 2021. FY22 product revenue has been rephased to
reflect the year end adjustment described in Note 4 to the FY22
Annual Report and Accounts and better reflect the actual returns
performance in the year. The net impact is immaterial to the
quarter.
3. JD Williams, Simply Be and Jacamo. Note that Ambrose Wilson
and Home Essentials were previously included in Strategic brands
but, consistent with the strategic evolution outlined in the FY22
Preliminary Results, are now included in Heritage brands.
4. Ambrose Wilson, Home Essentials, Fashion World, Marisota, Oxendales and Premier Man.
N Brown Group
David Fletcher, Head of Investor Relations +44 (0)7876 111242
MHP Communications
Simon Hockridge / Charles Hirst +44 (0) 20 3128 8789
NBrown@mhpc.com
Shore Capital - Nomad and Broker
Stephane Auton / Daniel Bush / John More +44 (0) 20 7408 4090
About N Brown Group:
N Brown is a top 10 UK clothing & footwear digital retailer,
with a home proposition. Our retail brands include JD Williams,
Simply Be and Jacamo, and our financial services proposition allows
customers to spread the cost of shopping with us. We are
headquartered in Manchester where we design, source and create our
product offer and we employ over 1,800 people across the UK.
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