Total group revenue at N Brown Group plc declined to 346.8 million pounds as a 3.3 percent increase in total product revenue was offset by the decline of 5.7 percent in financial services revenue. Adjusted pre-tax profit was 24.2 million pounds, an increase of 7.1 percent, while statutory pre-tax profit rose to 28.2 million pounds.
The company said in a release that product revenue growth was driven by strategic brands, up 14.9 percent, offset by the reduction in revenue from other brands. Revenue from other brands is a declining proportion of total product revenue, accounting for 18.7 percent in H1 22, down from 26.9 percent in the prior period.
Commenting on the first half results, Steve Johnson, the company’s chief executive, said: “Over the last six months the consumer environment has been volatile. Nevertheless, momentum has continued throughout the business, with customers responding well to our improved product ranges; particularly across our five strategic brands. EBITDA remains in-line with our expectations, and we are looking forward to exciting our customers with our new ranges as we head towards the Christmas peak.”
Review of N Brown’s first half performance
The managed decline in non-strategic other brands is primarily due to the closure of the Figleaves website in March 2021 and the discontinuation of the High & Mighty and House of Bath brands in September 2020. Due to the timing of the closure of the Figleaves website, the company expects to see this decline continue in H2 FY22.
The company added that returns increased by 3.8 percentage points against a comparative period. The group’s overall adjusted gross margin was 51.3 percent, compared to 44.3 percent in H1 21.
Adjusted EBITDA increased by 10.4 percent to 53 million pounds, with the adjusted EBITDA margin increasing by 150bps to 15.3 percent. Both adjusted and statutory operating profit were 31 million pounds compared to adjusted operating profit in H1 21 of 31 million pounds and statutory operating profit of 26.5 million pounds. Adjusted operating profit margin has remained flat year on year, whilst statutory operating profit margin has increased by 1.3bps to 8.9 percent.
Adjusted profit before tax was 24.2 million pounds, an increase of 7.1 percent year-on-year as a result of increased gross profit and a 19 percent reduction in net finance costs. Statutory profit before tax was 28.2 million pounds.
As a result of our improved product and branding, N Brown has taken the decision to focus on profitable growth, rather than promotion-led sales. As a result, product revenue is now expected to grow 1 percent to 4 percent. Overall, The company now expects group revenue to be broadly flat. As a result of our focus on profitable growth, N brown reiterates previously communicated expectations for adjusted EBITDA to be in the range of 93 million pounds to 100 million pounds.