Bad debts sharply lower at N. Brown

12th Oct 2010 07:12

Internet and catalogue home shopping company N. Brown said the positive trends seen in the first half of its financial year have continued into the second half.Total revenue in the 26 weeks to 28 August rose 3.2% to £349.7m from £338.7m a year earlier, in line with market expectations. Like for like (LFL) sales grew by 0.6%.E-commerce sales surged by 17.0% to £150m and accounted for 43% of total revenues, up from 38% last year.Profit before tax rose to £42.3m from £33.3m in the first half of the previous year, slightly below the £42.8m broker Panmure Gordon had been expecting. Profit before tax and fair value adjustment to financial instruments improved by 5.5% to £44.1m from £41.8m last year."This is another good performance, benefiting from the strong growth in online sales, the expansion of Jacamo and Marisota, and the acquisition of Figleaves and High and Mighty," said chief executive Alan White. "We have also seen bad debts reduce significantly," White added.Gross margin improved by six-tenths of a percentage point to 53.7%, reflecting the impact of the more conservative credit policies the company implemented last year. These policies restricted sales growth in the first half by about 2% but have reduced the net bad debt charge to sales ratio from 9.5% to 8.2%.Panmure Gordon had been expecting the gross margin to deteriorate to 52.9%.The increase in the rate of sales growth since the sluggish period around the General Election has continued in the first six weeks of the second half with total sales growth of 5.1% and like for like sales growth of 2.1%, the company said.An interim dividend of 5.04p has been proposed, a 15.1% increase on last year's interim pay-out.