N Brown posts drop in H1 revenue and profit

N Brown’s revenue declined 17.6 percent to 356.7 million pounds for the first half year, as a result of a 20.5 percent decline in product revenue and a 12.2 percent decline in financial services revenue. The company said statutory profit was 14.1 million pounds, a decrease of 4.7 million pounds, adjusted profit before tax was 22.6 million pounds, down 28.9 percent, statutory profit before tax was 14.1 million pounds, adjusted earnings per share were 6.72p and statutory earnings per share were 4.33p.

Commenting on the half year trading, Steve Johnson, N Brown’s Chief Executive, said in a statement: “We continue to transform the shape of N Brown against the uncertain backdrop of Covid-19. Our core, streamlined fashion brand proposition, supported by ever-more sophisticated digital capabilities, have driven a recovery in product sales since the initial impact of the pandemic. This has been supported by a strong uplift in Home and Gift sales following the launch of our new Home Essentials brand.”

Review of N Brown’s half year results

The company added that 20.5 percent decline in product revenue was primarily driven by the sudden and significant impact of Covid-19 at the start of the period. Product revenue was down 28.8 percent in the first quarter and recovered to be down 12 percent in the second quarter, when compared to the same periods in the prior year. The group also accelerated its digital transformation in the period, with digital sales now accounting for 92 percent of product revenue, an increase of 8 percentage points compared to the prior half year.

The group’s gross margin was 43.1 percent, compared to 53.5 percent in first half of 2020. Adjusted EBITDA decreased by 11.3 percent to 48 million pounds, however the adjusted EBITDA margin increased by 100bps to 13.5 percent. Overall, operating profit before exceptional items was 31 million pounds, down 21.9 percent year on year, while operating profit margin decreased by 60bps to 8.7 percent.

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