N Brown (BWNG) shares jumped by almost a third after the online fashion retailer announced that its trading levels have improved following a sharp collapse in March. N Brown’s home and gift sales are up 74 per cent in the past six weeks, having been supported by the launch of its new Home Essentials brand in April. Overall product sales for the period are down 25 per cent, with N Brown’s apparel sales falling 48 per cent as consumers continue to shun its online shops during the coronavirus pandemic.
N Brown also provided an update on the health of its financial services business. The retailer allows customers to buy on credit, and it has a £500m securitisation facility over customer balances that it can draw down from. In April, N Brown opted to grant customers the option to defer payments for three months, in line with Financial Conduct Authority guidance. N Brown therefore expects cash collection to drop over the coming months, and the retailer has secured an amendment to its securitisation to allow for volatility in its collection rates. N Brown also has a £125m revolving credit facility, and has drawn down £512m altogether from these two funding sources.
Analysts at Peel Hunt forecast full-year 2020 adjusted pre-tax profits and earnings per share of £70.8m and 19.5p respectively, falling to £35.5m and 9.8p in 2021.
