N Brown profits slim less than feared as sales swell

11th Oct 2016 07:05

(ShareCast News) - Profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of consensus forecasts and followed a recovery in sales in the second quarter.The interim dividend was held flat at 5.67p as the company revealed the the autumn-winter season has started in line with its plans, with management adopting a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".Group revenue rose 1% to £429.4m in the six months to 27 August, with product sales recovering to 0.6% growth from the 1.6% decline in the first quarter and financial services slowing to 1.9% from 3.4%.Underlying profit before tax, which excludes exceptional items and unrealised currency movements, was down to £31.6m from£39.4m in the same period last year, ahead of company-compiled consensus expectations.An exceptional cost of £9m related to financial services customer redress was larger than the £5m-£8m previously announced, with guidance for the 2017 financial year pointing to around £12m of exceptionals, with circa £2m expected in the second half from the ongoing UK tax disputes.Adjusted earnings per share from continuing operations 8.95p fell 20%.Net debt was up to £286.7m from £239.8m.Chief executive Angela Spindler hailed the progress made as she wrestles the retailer into the digital age."Spring Summer was challenging for the entire retail sector, and we were not immune to this, but we demonstrated our flexibility as we improved revenue performance through the season whilst controlling our costs well," she said.She added: "The Autumn Winter season has started in line with our plans. Our improving agility is enabling us to trade the business in a volatile environment. At this stage we are comfortable with current market expectations for the full year."