Tough start to second half for N. Brown

Internet and catalogue shopping firm N. Brown had a solid first half to its trading year but sales have gone ex-growth in the second half.Like-for-like (LFL) sales for the six weeks ended October 8th were down 1.5% on the corresponding period of last year, with the company seeing "extremely volatile shopping patterns" in which sales levels fluctuated from week to week.That was after revenue had grown by 1.5% in the 26 weeks to August 27th, the first half of N. Brown's trading year. Total group revenue in the first half increased by 4.0% to £363.7m from £349.7m the year before. Adjusting for the timing of the acquisition of Figleaves and the new High & Mighty stores, like-for-like revenue grew by 1.5% in the first half. Profit before tax climbed to £44.8m from £42.3m at the interim stage last year. Diluted earnings per share rose to 12.30p from 11.66p the year before.There was a net cash outflow of £15.8m resulting in net borrowings rising to £196.7m from £173.1m a year earlier. Gearing was maintained at 53%.The interim dividend has been increased by 5% to 5.29p.The company is inexorably moving away from its roots as a catalogue shopping firm for "women of a certain age", with revenue growth driven by increased online sales and increased contributions from younger brands.Internet sales now account for 48% of total home shopping sales, having increased by 17% on the corresponding period of last year. Sales from younger brands, targeted at customers under 45, were up by 14% to £128m."The outcome for the half will be determined by customers' attitude to Christmas shopping for both clothes and gifts, and also the year on year weather patterns. We have taken action in the first half to reduce our overheads, and these savings will be evident in the second half of the year," said Lord Alliance of Manchester, the group's chairman."The investments we have made in 2011 will leave the business well-placed for 2012 and beyond when economic conditions are more favourable," he added.--jh