REG - Brown (N.) Group PLC - Trading Statement

N BrownAnnouncement

16/06/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220616:nRSP0555Pa&default-theme=true

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             £106.3m   (0.6)%
    Strategic brands(3)      £75.2m    2.5%
    Heritage brands(4)       £31.1m    (7.2)%
 Financial Services revenue  £58.8m    (4.8)%
 Group revenue               £165.1m   (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 £30.8m.  The
securitisation facility was voluntarily underdrawn by £66.6m and can be
redrawn if required. In addition, the RCF of £100.0m and overdraft of £12.5m
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 (mailto: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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTKZGMVRKMGZZM