TIDMBWNG
RNS Number : 4994I
Brown (N.) Group PLC
20 June 2017
20 June 2017
N BROWN GROUP PLC
Q1 TRADING STATEMENT FOR THE 13 WEEKS TO 3 JUNE 2017
CONTINUED MOMENTUM ACROSS THE BUSINESS
N Brown Group Plc, the online, specialist fit, fashion retailer,
today announces the following trading update covering the 13 week
period to 3 June 2017.
Q1 highlights:
-- Group revenue +5.6%
-- Product revenue +10.2%, driven by strong Ladieswear performance
-- Financial Services revenue -4.9%, as expected
-- Online revenue +16%, with 71% of revenue now generated online, up 4ppts year-on-year
-- Total active customers (12 month rolling basis) up 4%, with
Power Brand active customers up 5%
-- Up to five loss-making Simply Be and Jacamo dual-fascia store closures announced
-- Full year guidance unchanged aside from exceptional costs relating to these store closures
Revenue yoy growth FY17 FY18
-------------------- ------------------------------------------------------------ ---------
Q1 (13wks) Q2 Q3 (18wks) Q4 (8wks) FY (52wks) Q1
(13wks) (13wks)
-------------------- ----------- --------- ----------- ---------- ----------- ---------
Product -1.6% +2.7% +5.9% +6.9% +3.4% +10.2%
-------------------- ----------- --------- ----------- ---------- ----------- ---------
Financial Services +3.4% +0.7% -0.5% -2.3% +0.4% -4.9%
-------------------- ----------- --------- ----------- ---------- ----------- ---------
Group -0.2% +2.1% +4.1% +3.6% +2.5% +5.6%
-------------------- ----------- --------- ----------- ---------- ----------- ---------
Angela Spindler, CEO, commented:
"We are pleased to report a good Q1 performance, with continued
momentum across all of our brands and categories. Ladieswear and
Simply Be in particular had a very strong period, with good
responses to our Spring/Summer campaigns, leading to further market
share gains.
"As a result of ongoing weak footfall in some locations, and
with a clear focus on driving financial returns across all areas of
our business, we will be closing up to five loss-making stores.
"Although the outlook for consumer confidence remains uncertain,
our offering is resonating with customers. At this early stage in
the financial year, trading is on track to meet our expectations.
We continue to invest in our customer proposition and remain very
confident in our future growth prospects."
Q1 performance
Our online metrics continue to be encouraging, with overall
traffic up 34% year-on-year. 71% of revenue is now generated
online, up 4ppts year-on-year. For new customers, online
penetration was 78%, up 2ppts year-on-year. Smartphones accounted
for 51% of all sessions, up from 42% last year, with mobile devices
as a whole accounting for 74%, up 5ppts. Our conversion rate was
slightly down overall due to the continued increase in share of
traffic from smartphones, as expected.
During the period average selling price, average units per
basket and purchase frequency all increased year-on-year.
Product
Product revenue by % change
brand yoy
------------------------- ---------
JD Williams brand +12.7%
Fifty Plus title +1.3%
------------------------- ---------
JD Williams (inc. Fifty
Plus) +9.3%
Simply Be +20.5%
Jacamo +5.5%
------------------------- ---------
Power Brands (exc.
Fifty Plus) +14.0%
Power Brands (inc.
Fifty Plus) +12.2%
------------------------- ---------
Secondary Brands +5.4%
Traditional Segment +10.7%
------------------------- ---------
Product Revenue +10.2%
------------------------- ---------
Our new Spring/Summer campaigns, particularly JD Williams'
"Spring into Summer" and Simply Be's "We Are Curves", were
well-received by customers, driving strong performances during the
period. The migration of our Fifty Plus title into JD Williams
remains on track for completion by the end of this season.
In Jacamo, we continue to achieve double-digit growth in active
customers, which is being partially offset by the reduction in
sales of some larger ticket electrical goods, in line with the
trend reported during the second half of FY17.
The 10.7% growth in our Traditional segment reflects the
improvements made to product and marketing during the past two
seasons, resulting in market share gains.
Product revenue by % change
category yoy
------------------------ ---------
Ladieswear +13.5%
Menswear +6.3%
Footwear & Accessories +13.4%
Home & Gift +5.8%
------------------------ ---------
International
International revenue was up 10%, and down 2% in constant
currency terms.
Revenue from Ireland was up 17%, and 9% in constant currency
terms, driven by the strong Ladieswear performance.
Revenue from the USA was up 4%, and down 9% on a constant
currency basis. Following the delivery of our new technology
platform, a step up in marketing investment is planned in Q2 to
drive new customer recruitment going forwards.
Stores
We will be closing up to five Simply Be and Jacamo dual-fascia
stores. This decision takes into account weak high-street footfall,
both current and predicted, together with significant future
business rate increases for some stores. Together, these five
stores contributed GBP5.0m revenue but accounted for the entire
GBP2.0m operating loss of our store estate in FY17.
The process will be completed by the end of August and we
anticipate an exceptional cost in relation to these of GBP10m to
GBP14m, of which approximately 70% will be cash.
We continue to improve the performance of the remaining 10
Simply Be and Jacamo dual-fascia stores.
During Q1, revenues from our store estate were slightly up year
on year, with our Simply Be and Jacamo dual-fascia stores recording
mid single-digit growth, and High & Mighty revenue down, as
expected.
Financial Services
Revenue from our Financial Services business was down 4.9% year
on year, in line with our expectations. This was impacted by the
lower interest revenue booked on payment arrangement debt, due to
the sale of some of this debt at the end of FY17, as previously
disclosed. Within the revenue performance, interest lines were down
low single-digits, as a result of this debt sale, whilst
non-interest lines were down high teens percentage as a result of
the better quality loan book which reduced admin fees.
Both the revenue performance and the gross contribution from
Financial Services were in line with our plans.
Fit 4 the Future
We continue to make good progress upgrading our core web
platform and Financial Services systems. The new High and Mighty
site will go live shortly. We remain on track to have all brands
replatformed by the end of Summer 2018, as previously
disclosed.
FY18 Guidance
Aside from the exceptional cost guidance, as discussed above,
all other FY18 guidance is unchanged. Please note that all P&L
guidance is based on comparison to the 52 week FY17 figure.
-- Product gross margin -120bps to -20bps. The decline in gross
margin will be first half weighted due to the timing of FX
impacts
-- Financial Services gross margin flat to +100bps
-- Group operating costs up 3.5% to 5.5% (excluding Depreciation & Amortisation)
-- Depreciation & Amortisation GBP29m to GBP30m. We are
expecting a charge of GBP12m to GBP13m in the first half
-- Net interest GBP8m to GBP9m
-- Tax rate c.20%
-- Capex of c.GBP40m
-- Net debt GBP300m to GBP320m
-- Exceptional costs of GBP13m to GBP17m, with the majority
linked to store closures and c.GBP3m as a result of our ongoing tax
disputes with HMRC
Reporting calendar
We will be announcing our first half results on 12(th) October
2017.
For further information:
N Brown Group On the day 07887
536153
Angela Spindler, CEO Thereafter 0161 238
Craig Lovelace, CFO 1845
Bethany Hocking, Director
of Investor Relations and
Corporate Communications
MHP Communications
John Olsen / Simon Hockridge 0203 128 8100
/ Gina Bell NBrown@mhpc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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