TIDMBWNG
RNS Number : 1634C
Brown (N.) Group PLC
17 June 2021
17(th) June 2021
TRADING UPDATE FOR THE 13 WEEKS TO 29(th) MAY 2021
Q1 FY22 trading in line with expectations
Highlights
-- Good momentum in product revenue which returned to growth with a 4.6% increase in Q1
-- Five strategic brands of Jacamo, Simply Be, JD Williams,
Ambrose Wilson and Home Essentials, grew product revenue by
15.5%
-- As guided, Financial Services revenue was 5.9% lower than the prior year
-- Customer repayment rates higher than the prior year
-- Amanda Holden and Davina McCall signed as brand ambassadors for JD Williams
-- Strong net cash position of GBP84.9m(1) at 29(th) May 2021
-- FY22 guidance remains unchanged
Q1 FY22 Revenue performance
Q1 FY22(2) vs. Q1 FY21(3) Q1 FY22(2) % change
GBPm
Product revenue 106.9 +4.6%
----------------- ---------------
Strategic brands(4) 86.1 +15.5%
----------------- ---------------
Other brands(5) 20.8 (24.6)%
----------------- ---------------
Financial Services revenue 61.8 (5.9)%
----------------- ---------------
Group revenue 168.7 +0.5%
----------------- ---------------
Product revenue growth
The Group's Q1 product revenue growth was driven by the five
strategic brands which grew 15.5% in the period. This is as a
result of the strategic transformation which has taken place over
the last two years. In Q1 FY22 strategic brands were 81% of product
revenue compared to 67% in the same period 2 years ago and this
represents the first quarter of product revenue growth since Q3
FY18.
Within our product lines, Clothing & Footwear sales have
continued to recover and demand increased 21% compared to the prior
period with own brand Womenswear +27% and Menswear own brand +25%.
Demand for Home & Gift was lower than the prior period which
benefitted from pandemic related purchases of garden furniture and
personal grooming products.
As previously guided, lower product revenue in the prior year
resulted in a smaller debtor book and a 5.9% reduction in Financial
Services revenue. Customer repayment rates are higher than the
prior year and as at 29(th) May 2021 less than 0.2% of debtor
balances remained on a Covid-19 related payment deferral, down from
a peak of 3% in May 2020.
We continue to invest in effective marketing spend to increase
awareness of our strategic brands and their customer offer. This
month, we have signed Amanda Holden and Davina McCall as brand
ambassadors for JD Williams to increase consideration for our
boutique shopping experience amongst the target audience.
Strong financial position
The Group finished the period with net cash of GBP84.9m(1) ,
leaving it well positioned to continue its investment in strategic
initiatives to drive profitable growth. Adjusted net debt was
GBP287.7m(6) , incorporating GBP84.9m of cash and GBP372.6m of debt
drawn against the securitisation funding facility which is backed
by the eligible customer receivables. The GBP502.3m net customer
loan book significantly exceeds this adjusted net debt figure. The
Group has no unsecured debt.
FY22 guidance is unchanged
-- Product revenue growth of between 3% and 7%
-- Financial services revenue is expected to be lower compared to FY21
-- Group revenue growth to be +1% to +4%
-- Adjusted EBITDA(7) to be in the range of GBP93m to GBP100m
-- Capex of GBP30m - GBP35m
-- Depreciation and amortisation of c.GBP40m
-- Net interest costs of c.GBP16m
-- Adjusted net debt(6) is expected to be in the range of GBP280m to GBP300m
Steve Johnson, Chief Executive, said:
"The strategic transformation initiatives we have enacted over
the past two years have now started to deliver product revenue
growth, with customers responding well to the new ranges across our
core brands.
We have a number of exciting initiatives in the pipeline and
today we have announced a new partnership with Amanda Holden and
Davina McCall to be the new faces of JD Williams, leading some
innovative new campaigns which will serve as a rich source of
inspiration for our customers.
Whilst the external environment remains challenging, we have
made a good start to the financial year and trading remains in-line
with our expectations."
1. Excludes debt securitised against receivables (customer loan
book) of GBP372.6m and lease liabilities of GBP4.3m.
2. Q1 FY22 is the 13 weeks to 29(th) May 2021.
3. Q1 FY21 is the 13 weeks to 30(th) May 2020 and is adjusted to
reflect the actual returns performance in Q1 FY21, as reflected in
the FY21 results.
4. JD Williams, Simply Be, Ambrose Wilson, Jacamo and Home Essentials.
5. Other brands are Fashion World, Marisota, Oxendales and
Premier Man. High & Mighty, House of Bath and Figleaves were
folded into Strategic brands in FY21.
6. Total liabilities from financing activities less cash, excluding lease liabilities.
7. Adjusted EBITDA is defined as operating profit, excluding
exceptional items, with depreciation and amortisation added
back.
For further information:
N Brown Group
Will MacLaren, Director of Investor Relations and +44(0)7557 014
Corporate Communications 657
MHP Communications
Simon Hockridge / James Midmer +44(0)203 128
8789
NBrown@mhpc.com
Shore Capital - Nomad and Broker
Dru Danford / Stephane Auton / Daniel Bush / John +44 (0) 20 7408
More 4090
About N Brown Group:
N Brown is a top 10 UK clothing and footwear digital retailer,
with a Home proposition, serving customers across five strategic
brands. Our strategic brands are JD Williams, Simply Be, Jacamo,
Ambrose Wilson and Home Essentials and our financial services
proposition allows customers to spread the cost of shopping with
us. We are headquartered in Manchester where we design, source and
create our product offer and we employ over 1,800 people across the
UK.
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