N Brown hits record profits and eyes 'more ambitious' future

1st May 2014 08:49

A strong early performance in the US helped online clothing retailer N Brown post a year of record profits, with new Chief Executive Angela Spindler confident of reaching double-digit sales growth in 2016.The FTSE 250 company, which specialises in plus-sized and middle-aged fashion, generated a profit before tax and fair value adjustments up 5.3% to £100.1m as sales climbed 6.4% to £834.9m. Adjusted earnings per share declined 1.4% to 27.9p, incorporating a higher tax charge as previously guided by management.First-half growth of 8% slowed to 4.9% through the second as some sales were foregone due to a tightening of its credit policy and a pausing of expansion in the third quarter in the US.A lot had been achieved in the year while the group entered a period of transition under Spindler, who was appointed last July. N Brown is investing in the further development of its multi-channel offer, increasing customer recruitment, revitalising major brands and driving international expansion for future growth and is still planning to step up the pace of change in the business. Spindler was encouraged by the results of the early changes but alluded to an even "more ambitious future".She was particularly encouraged by the strong performances from its 'younger' brands, focused on ages 30-plus, primarily driven by Simply Be and Jacamo, which were the biggest drivers of growth in absolute terms as they begun a store roll-out to complement their online strength. "Going forward the benefits of our strategic initiatives will start to come through as we look to achieve a double-digit rate of sales growth during the financial year ending February 2016," she said."I am even more convinced that we have a great platform and you'll see us build on that strong base at an even faster pace as the implementation of our plan gathers momentum." Follow the update, broker Shore Capital held its 2016 forecasts but downgraded its 2015 forecasts, reflecting the lower base of earnings, an anticipated £1m cost and trading losses associated with a flagship store on Oxford Street in London that is due to open in September, plus around £1m of annual double running costs as management has now chosen to maintain investment in existing websites through the period of the infrastructure improvement programme. It said this was "still early days" in an "exciting" medium term growth story in light of Spindler's pledge of double-digit growth.Shares in the company were up 2.9% to 528p at 09:05 on Thursday.OH