Interim Management and AGM Trading Statement

7 Jul 2009 07:00



Tuesday 7 July 

N Brown Group

INTERIM MANAGEMENT AND AGM TRADING STATEMENT

At the Annual General Meeting being held today at 12.30pm Lord Alliance of Manchester CBE, Chairman, will make the following statement on current trading.

In the 18 weeks ended 4 July 2009 group turnover increased by 5.1%, in line with our plan, with contributions from all our major customer and product groups.

Ladieswear and menswear continue to benefit from the extended ranges of branded clothing exclusively available for our customers in a full range of sizes and fittings. We are still seeing strong contributions from the newer catalogue brands, such as Marisota and Jacamo.

Sales have been driven by the improved targeting and quality of our home shopping catalogues and the recent warmer weather has benefited the demand for summer clothing and footwear. In addition we have continued to invest heavily in our websites to improve their presentation and functionality, and this has resulted in a 25% increase in online sales, which now represent 37% of the total. We still have a number of major enhancements in the pipeline which will continue to improve the online experience for our customers, both from a sales and service perspective. 

Due to the material uncertainties within the economy, we budgeted to be more cautious in customer recruitment, the provision of credit facilities and cost control. Whilst this has constrained our sales growth slightly, it has also led to a slowing in the rate of debtors growth, which is currently 8% compared with 13% at the year end, improving our cash flow position significantly relative to last year. We are proactively managing those debtors who fall into arrears with alternative payment schemes where possible. The expected increase in bad debts has resulted in a reduction in the rate of gross margin by 1.5%, although at the pre-tax profit level this is fully offset by operational cost savings and reduced interest charges.

The group's financial position remains strong and the board continues to believe that our business model and strategy to target niche customers and products will prove to be beneficial in the remainder of the financial year.

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