The UK clothing market is struggling, but adjusted pre-tax profit of £81.6m beat consensus expectations for apparel retailer N Brown (BWNG), while like-for-like group revenue grew by a steady 3.9 per cent. Management warned that March was a difficult month for fashion retail – likely a reference to the disruptive snowy weather and consequent delays in demand for spring/summer stock. Despite the deep freeze, expectations for the current year remain unchanged, as pent-up demand eventually thawed thanks to April's brief heatwave.
Statutory numbers were hurt by provisions taken on historic redress issues over mis-sold insurance products. (It's worth noting that the introduction of new accounting standard IFRS9 – effective FY2019 – significantly increases the scope for provisions on receivables.) But chief executive Angela Spindler says that door “has closed”. Instead, she remains focused on driving the online offering: web-based sales were up 10 per cent year on year, while online penetration across the group’s brands now stands at 73 per cent, with around three-quarters of all online traffic now driven by mobile devices.
Analysts at Shore Capital expect pre-tax profit of £83.4m for the year ending March 2019, giving EPS of 22.9p, compared with £81.6m and 23p in FY2018.
| N BROWN (BWNG) | ||||
| ORD PRICE: | 204.8p | MARKET VALUE: | £580m | |
| TOUCH: | 204.8-205.4 | 12-MONTH HIGH: | 361p | LOW: 164p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 46 | |
| NET ASSET VALUE: | 162p* | NET DEBT: | 75% | |
| Year to 3 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 819 | 96.8 | 27.1 | 14.23 |
| 2015 | 837 | 78.3 | 21.8 | 14.23 |
| 2016 | 866 | 72.2 | 19.5 | 14.23 |
| 2017 | 901 | 57.6 | 15.7 | 14.23 |
| 2018 | 922 | 16.2 | 4.4 | 14.23 |
| % change | +2 | -72 | -72 | - |
| Ex-div: | 5 Jul | |||
| Payment: | 3 Aug | |||
| *Includes intangible assets of £156m, or 55p a share | ||||
