TIDMBWNG
RNS Number : 5025A
Brown (N.) Group PLC
30 September 2020
30(th) September 2020
TRADING UPDATE FOR THE 6 MONTHS TO 29(th) AUGUST 2020
Highlights
-- Improved product revenue trajectory through Q2 with 92% of product revenue now digital
-- Financial services cash collection rates in line with the prior year
-- Continued operating cost reduction reflecting agility of business model
-- Reduction in debt underway and continuing
-- Group continues to trade in line with its expectations
Improved product revenue trajectory
Q1 FY'21 Q2 FY'21 H1 FY'21
Product revenue (28.8%) (12.0%) (20.5%)
--------------- --------------- --------
Financial Services revenue (8.3%) (15.8%) (12.3%)
--------------- --------------- --------
Group revenue (21.9%) (13.4%) (17.6%)
--------------- --------------- --------
Q1 FY'21 is the 13 weeks to 30(th) May 2020, Q2 FY'21 is the 13
weeks to 29(th) August 2020
Product revenue trajectory has continued to improve through the
second quarter from the sudden and significant decline experienced
in the first quarter as Covid-19 lockdown restrictions were
introduced. Apparel sales have continued to recover from mid-March
levels and demand for Home & Gift, supported by the launch of
our new Home Essentials brand on 1(st) April, continued to be well
above the prior year. All Womenswear and Menswear brands performed
better in the second quarter, in particular JD Williams and
Jacamo.
As expected, lower product revenue, regulatory changes and a
smaller debtor book resulted in lower Financial Services revenue. A
very small number of customers required forbearance as a result of
FCA Covid-19 guidance and as at 29(th) August 2020 less than 1% of
debtor balances remained on a Covid-19 related payment holiday,
down from a peak of 3% in May 2020.
Continued focus on operating costs
The Group took swift and decisive action to maximise operating
efficiency and strengthen liquidity following the onset of the
pandemic. The Group has continued to exercise this discipline with
operating costs materially lower in the second quarter compared to
the prior year. This is further demonstration of the Group's agile
and flexible operating cost base. Material volume and cost
efficiency savings were achieved across all areas of the cost base,
with the most material savings in marketing costs. As previously
guided, in this financial year the Group is confident of offsetting
at least 75% of the Group gross profit decline through operational
cost savings.
Reduction in debt underway
Financial Services cash collection rates have continued to
perform and remain in line with the prior year. As a result of our
on-going focus on cash generation, tight cost control, reduction in
capital expenditure and suspension of the dividend, together with a
smaller debtor book, the Group has started its objective of
reducing its level of indebtedness. The Group has reduced net debt
by 17.3% in the half, to GBP411.1m. As previously guided, we expect
our year-end net debt to be in the range of GBP380m to GBP400m.
As at 29(th) August 2020, drawings under the Group's borrowing
facilities stood at GBP455.9m down from GBP544.6m at 29(th)
February 2020. Net cash generation in the period was GBP45.3m and
as at 29(th) August 2020 cash balances stood at GBP44.8m and the
overdraft facility was undrawn.
GBPm 29(th) August 29(th) February Change
2020 2020
Drawings under the RCF (75.0) (125.0) (40.0%)
-------------------- ---------------------- -------
Drawings under the CLBILS(1) (2.0) - n/a
-------------------- ---------------------- -------
Drawings under the overdraft - - -
facility
-------------------- ---------------------- -------
Cash balances 44.8 47.5 (5.7%)
-------------------- ---------------------- -------
Unsecured Net Debt(2) (32.2) (77.5) (58.5%)
-------------------- ---------------------- -------
Drawings under the securitisation
facility (378.9) (419.6) (9.7%)
-------------------- ---------------------- -------
Net Debt(3) (411.1) (497.0) (17.3%)
-------------------- ---------------------- -------
Gross Debtor Book 632.1 656.9 (3.8%)
-------------------- ---------------------- -------
1 Under the terms of the GBP50m CLBILS three-year term loan
facility the Group was required to drawdown a minimum of GBP2m
against the facility in order to maintain access to it
2 Excludes debt securitised against receivables (customer loan
book) of GBP378.9m and lease liabilities of GBP6.0m
3 Total liabilities from financing activities less cash,
excluding lease liabilities
Steve Johnson, Chief Executive, said:
"It is encouraging to see a continued improving trend in trading
following the sharp decline witnessed upon the initial impact of
Covid-19, with trading in-line with expectations. Home & Gift
sales in the first half of our financial year have been
particularly strong and our fashion brands continue to recover,
particularly JD Williams and Jacamo. We have accelerated our
digital transformation and 92% of our product revenue is now
digital.
Our financial services cash collection rates have remained
stable and we continue to offer support and flexibility to those
credit customers who require it. We will continue to implement our
refreshed strategy, and particularly mindful of an uncertain UK
retail environment, we will continue to focus on cost control,
deleveraging and cash generation."
Half year results for the 6 months ended 29 (th) August 2020
N Brown will release its results for the 6 months ended 29(th)
August 2020 on 5(th) November 2020.
For further information:
N Brown Group
Will MacLaren, Director of Investor
Relations and Corporate Communications 07557 014 657
MHP Communications
Andrew Jaques / Simon Hockridge 0203 128 8789
/ James Midmer NBrown@mhpc.com
About N Brown Group:
N Brown is a top 10 UK clothing & footwear digital retailer.
We are size inclusive, focusing on the needs of underserved
customer groups - size 20+ and age 50+. We offer an extensive range
of products, predominantly clothing, footwear and homewares, and
our financial services proposition allows customers to spread the
cost of shopping with us. We have five distinct brands: Simply Be,
JD Williams, Ambrose Wilson, Jacamo and Home Essentials. We are
headquartered in Manchester where we design, source and create our
product offer and we employ over 2,200 people across the UK.
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END
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