Brown Group Regulatory News (BWNG)

24 Jan 2007 07:01

Brown (N.) Group PLC24 January 2007 N Brown Group plc Trading update and announcement of £80 million return to shareholders N Brown Group plc, the home shopping retailer, today announces a trading update,including the Christmas period, and a proposed £80 million one-off return ofvalue to shareholders which is equivalent to 27 pence per ordinary share. Group sales for the 21 weeks ended 20th January 2007 are up by 14.2%. Homeshopping sales are up by 14.8% in total and 10.8% on a like-for-like basis. Thismomentum in sales growth has been maintained despite strong comparatives forlast year. We continue to see strong levels of growth in all key customer groups andproduct ranges. Sales from our established customers have been ahead of ourexpectations, and the recruitment of new customers has been on target, bothenhancing our customer database. The proportion of online sales continues torise and the value of these sales is 43% up on last year. The mix of customers and products, combined with a detrimental change to the VATrules for bad debt relief, has resulted in a rate of gross margin 1.8% belowlast year's rate in the second half to date. However operational cost savingshave offset the impact of the lower rate of gross margin. We have been looking at improving the efficiency of our balance sheet for sometime, whilst retaining flexibility for our potential requirements for workingcapital and acquisitions. The Board has undertaken an in-depth review andproposes a one-off return to shareholders of 27p per ordinary share, equivalentto approximately £80 million. In addition there will be a £15 million specialcontribution made to the pension fund in March 2007 with a total further paymentof £12 million phased over the next three years to eliminate the deficit. Fulldetails are disclosed in a separate announcement made by the company today. As a result of the continued momentum in sales growth the board is confident ofat least meeting its expectations for the full year to February 2007. Thisexcludes the exceptional costs of £0.9m arising from the return of value toshareholders. Both the one-off return of value to shareholders and our trading for the year todate demonstrate the continued confidence the board has in the group's prospectsand strategy for 2007. ENDS The company will be hosting a conference call for analysts and investors at 9.00GMT today. Participants are invited to call five minutes prior to this time. Direct Dial-in number +44 (0) 1296 480100Passcode 704413 A replay facility will be available for a week after the announcement:Dial-in number +44 (0) 207 136 9233 and passcode 21186889 #. For further information please contact: N Brown Group plc Alan White, Chief Executive Tel: 0161 238 2202Dean Moore, Finance DirectorWebsite: www.nbrown.co.uk Gavin Anderson & Company Fergus Wylie/Clotilde Gros Tel: 020 7554 1400 This information is provided by RNS The company news service from the London Stock Exchange