Shares in retailer N Brown (BWNG) rose 7 per cent after the group reported better-than-expected first-half numbers. However, expectations were low as a result of the extensive restructuring effort still under way at the company and last year's shock profit warning. Even on an adjusted basis, pre-tax profits for the half-year to 29 August fell 16 per cent to £35m.
Chief executive Angela Spindler told investors to expect a stronger finish to the current financial year. That's because exceptional costs associated with the revamp - which involved 380 redundancies and the closure of 18 clearance stores in the first half, costing nearly £15m - should fall to between £2m and £3m in the second half.
As the operational transformation from a catalogue-led business to a digital retailer continues, N Brown is also changing the way it reports its financial results. For the first time, the group split its revenues into 'product' and 'financial services'. The former grew 6.1 per cent during the first six months as digital sales took off, while the latter - which tracks the money N Brown makes on the credit it offers customers - dipped 0.4 per cent. Overall, like-for-like sales grew 3.1 per cent.
Peel Hunt expects pre-tax profits of £86.6m for the current financial year, giving EPS of 24.6p, compared with £86.2m and 21p for the year ended February 2015.
| N BROWN (BWNG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 337p | MARKET VALUE: | £954m | |
| TOUCH: | 335-337p | 12-MONTH HIGH: | 456p | LOW: 283p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 174p* | NET DEBT: | 49% | |
| Half-year to 29 August | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 399 | 42.7 | 11.9 | 5.67 |
| 2015 | 416 | 19.4 | 5.5 | 5.67 |
| % change | +4 | -55 | -53 | - |
Ex-div: 10 Dec Payment: 8 Jan *Includes intangible assets of £113m, or 40p a share | ||||
