N Brown’s (BWNG) commercial offering differs from many of its competitors in that it targets underserved segments of the retail market, such as plus-size apparel. Where it doesn’t differ is a growing – now, in its case, ‘absolute’ – reliance on online commerce. It accounted for 80 per cent of product sales at its March year-end, by which time a decision to close all 20 of its conventional retail outlets had been enacted.
The closures, along with other one-off items, such as a £45m charge for missold PPI to customers, fed into £146m of exceptional charges. Strip these out, however, and adjusted operating profit increased 8 per cent to £97.9m. The gross margin was broadly stable at 52.1 per cent.
The overwhelming majority of the group’s debt is securitised against receivables as part of the financial services division’s customer loan book. Related credit risk is limited due to a large and diverse customer base, although an increased level of receivables meant that interest payments were up 12.7 per cent. Net debt increased by 35 per cent to £468m, of which core net debt amounts to £77.7m.
Broker Peel Hunt is forecasting adjusted pre-tax profit to rise to £84.1m in 2020, giving EPS of 23.2p (up from £83.6m and 21.2p in 2019).
N BROWN (BWNG) | ||||
ORD PRICE: | 124p | MARKET VALUE: | £ 352m | |
TOUCH: | 123.6-124.3p | 12-MONTH HIGH: | 219p | LOW: 82p |
DIVIDEND YIELD: | 5.7% | PE RATIO: | NA | |
NET ASSET VALUE: | 110p* | NET DEBT: | 150% |
Year to 02 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
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 |
2019 | 914 | -57.5 | -20.5 | 7.10 |
% change | -1 | - | - | -50 |
Ex-div: | 04 Jul | |||
Payment: | 02 Aug | |||
*Includes intangible assets of £145m, or 51p a share |