Brown (N.) Group PLC
24 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 of
value 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%. Home
shopping sales are up by 14.8% in total and 10.8% on a like-for-like basis. This
momentum in sales growth has been maintained despite strong comparatives for
We continue to see strong levels of growth in all key customer groups and
product ranges. Sales from our established customers have been ahead of our
expectations, and the recruitment of new customers has been on target, both
enhancing our customer database. The proportion of online sales continues to
rise 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 VAT
rules for bad debt relief, has resulted in a rate of gross margin 1.8% below
last year's rate in the second half to date. However operational cost savings
have offset the impact of the lower rate of gross margin.
We have been looking at improving the efficiency of our balance sheet for some
time, whilst retaining flexibility for our potential requirements for working
capital and acquisitions. The Board has undertaken an in-depth review and
proposes a one-off return to shareholders of 27p per ordinary share, equivalent
to approximately £80 million. In addition there will be a £15 million special
contribution made to the pension fund in March 2007 with a total further payment
of £12 million phased over the next three years to eliminate the deficit. Full
details 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 of
at least meeting its expectations for the full year to February 2007. This
excludes the exceptional costs of £0.9m arising from the return of value to
Both the one-off return of value to shareholders and our trading for the year to
date demonstrate the continued confidence the board has in the group's prospects
and strategy for 2007.
The company will be hosting a conference call for analysts and investors at 9.00
GMT today. Participants are invited to call five minutes prior to this time.
Direct Dial-in number +44 (0) 1296 480100
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 2202
Dean Moore, Finance Director
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