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Brown (N.) Group PLC (BWNG)

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Wednesday 09 May, 2007

Brown (N.) Group PLC

Final Results

Brown (N.) Group PLC
09 May 2007

09 May 2007

                                N Brown Group plc

                      FOR THE YEAR ENDED 24 FEBRUARY 2007

N Brown Group plc, the Manchester based direct home shopping company, today
announces its Preliminary results for the 52 weeks to 24 February 2007.


   •Group turnover rose 13.9% to £533.8m
   •Group operating profit from continuing operations increased by 26.5% to
   •Group profits before tax up 20.9% to £65.4m*
   •Earnings per share up 21.2% from continuing operations to 15.89p
   •Online sales grew by 51% to £112m representing 22% of total sales (2006:
   •Proposed dividend increase of 20% to 5.34p, making a total for the year
    of 7.53p also up 20%
   •Current trading for Group shows sales growth of 17.9% for the first 10
    weeks to 5 May 2007, including online sales up 47% representing 26% of the

* After provision for costs of £0.9m from the £80m return of value, and £2.4m
adverse fair value adjustment on foreign exchange contracts

Lord Alliance CBE, Chairman, said:

'The board has been successful in focusing on its core home shopping business, 
resulting in record levels of turnover and operating profit and a strong balance
sheet. This enabled us to make the one-off £80m return of value to shareholders
in March.'
'Following an encouraging start, I am confident the group will make further 
progress this year, despite challenging market conditions.'

Alan White, Chief Executive, added:

'This was another excellent year for the group and we are pleased with the
strong performance across the business. We have focused on improving the quality
and scope of our catalogue and product ranges, providing better customer
services and the continued development of all our channels to market. The
internet has become an increasingly important part of our strategy and as well
as providing a core sales channel, now serves as an excellent platform for the
launch of new catalogue brands and concepts. With the strategy we have in place,
I am confident that we will deliver further growth this year.'


For further information please contact:

N Brown Group plc
Alan White, Chief Executive                On the day: 0207 554 1400
Dean Moore, Finance Director               Thereafter: 0161 238 2202
Website :

Gavin Anderson & Company
Fergus Wylie / Clotilde Gros               Tel: 020 7554 1400

                           CHAIRMAN'S STATEMENT 2007

The group results for the 52 weeks ended 24th February 2007 show continued
progress in our specialist home shopping business, resulting in record levels in
both sales and profits. To reflect this the directors are proposing a 20%
increase in the final dividend on top of the 27p per share return of value paid
to shareholders in March 2007. The group has also announced its commitment to
clearing the current pension fund deficit of £27m by 2010.


Group revenue from continuing operations is up by 13.9% to £533.8m and operating
profit is up by 26.5% to £76.4m. Profit before taxation is up by 20.9% to £65.4m
after providing for costs of £0.9m arising from the £80m return of value to
shareholders, and a £2.4m adverse fair value adjustment on foreign exchange
contracts (2006: £1.7m gain). Excluding these items, the group profit before
taxation is up by 31.1%. Earnings per share from continuing operations are
15.89p, an increase of 21.2%. The directors are proposing a 20.0% increase in
the final dividend to 5.34p, making a total for the year of 7.53p (up 20.0%),
covered 2.1 times.

Net debt at the year-end was £104.0m, up £11.1m on last year principally due to
the acquisition of Gray & Osbourn and an increase in home shopping debtors as a
consequence of buoyant trading. Net interest payable on borrowings was £7.1m,
covered 10.7 times. Gearing at the year end was 51% (2006: 38%) before the
return of £80m to shareholders in March 2007.

Home Shopping

Turnover in our home shopping division was £523.8m, an increase of 14.0%.
Operating profit rose 22.3% to £76.3m. These results have been driven by strong
levels of growth in all key customer groups and product categories, supported by
improvements in customer service and efficiencies in our operating costs.

Sales to mid-life customers, aged 45 to 65, rose by 14% to £363m and there is
further excellent growth potential in this core market. These sales include £12m
from Gray & Osbourn, an upmarket ladieswear catalogue which we acquired in June
2006 for £9.4m. Revenue from the younger titles, serving those customers aged 30
to 45, increased by 16% to £136m. Our catalogue brands for the 65 plus market
contributed sales of £25m, up by 4%.

The number of active established customers on our database rose by 3% and
improvements to our product ranges and catalogue offers combined to increase the
average spend per customer by 7%. Sales from newly recruited customers rose by
9%. This demonstrates the success of our continued focus on targeting those
customers who will purchase from us over the long-term, even though the initial
recruitment costs are much higher.

The sales growth has been fairly evenly spread amongst our four product groups
with ladieswear up 15%, footwear up 11%, menswear up 9% and home and leisure up
14% on the previous year. In the clothing and footwear categories we have
expanded the number of lines and size options even further to reinforce our
market-leading position as the best provider of a wide choice of fittings in the
UK. The ranges are now more fashionable reflecting the younger outlook of our
existing customers. This has also proved attractive to new customers who find it
hard to match the choice of styles and sizes we offer when they are on the high

The format and frequency of our mailing program has continued to evolve,
complemented by expanded email and telemarketing campaigns. We have implemented
a significant increase in the number of pages contained in our mid-season
mailings facilitated by the Royal Mail's new pricing structure introduced in
August 2006. This reduces costs in the short-term and gives downstream benefits
to ourselves, Royal Mail and our customers. The increased pagination has
benefited our home and leisure ranges in particular as this increased exposure,
together with a successful Christmas catalogue, accounts for the substantial
sales uplift we have experienced.

We have focussed more of our resources on developing online sales and the
internet remains our fastest growing channel to market. Online orders have now
overtaken those received by mail, rising by 51% to £112m, and accounting for 22%
of total home shopping sales compared with 16% last year . The internet is more
convenient for our customers and continues to deliver incremental sales, attract
customers and reduce our operating costs.

There are good reasons behind the fall in gross margin on home shopping sales
from 56.8% to 55.6%. Our new credit scoring systems have enabled us to target
increases in customers' credit limits thereby generating profitable incremental
sales. However as expected this has also led to some additional bad debt and
there has been a reduction in the VAT recoverable on bad debt. We have been more
aggressive with our in-season mark down activity both in the discount leaflets
and our online clearance sites, which has contributed to the gross margin
reduction. The benefit of this action is that, excluding the stock we acquired
with Gray & Osbourn, there has been no increase in our stock levels.

Operating costs have only increased by 8.0% with substantial efficiencies
achieved in carriage, marketing and payroll costs. The net result of these
offsetting factors is a 1.0% increase in the operating margin rate to 14.6%.

Current Trading

The favourable sales trends have continued into the new financial year. Sales
for the ten weeks to 5th May 2007 have increased by 17.9%, or by 14.0% excluding
the sales of Gray & Osbourn. Again we are seeing good growth rates across all
our major product categories and customer groups. Online sales continue to
flourish with an increase of 47%, representing 26% of the total.

Two new launches have taken place this season. Simply Be Home, a catalogue of
home and leisure goods suitable for our younger customers, was launched in
February 2007. In addition, we launched Simply Yours in March 2007 to capture an
increased share of the lingerie market, particularly in the larger sizes. Both
of these catalogue brands have delivered to our expectations and will be
developed further during the year.


We believe we have a clear understanding of the needs and requirements of our
customers and will continue to expand the range of catalogues and products to
meet their demands. The internet provides a very good forum for low-cost testing
of new products and concepts and we plan to take full advantage of our expertise
in this field. During the last year we have invested over £12m in our customer
contact centres and distribution centres to ensure we can improve the service to
our customers as well as driving additional efficiencies in our operations.

As a result of the stronger than expected trading since the beginning of 2007
the board is confident that the management and our excellent workforce have the
skills and expertise to deliver further progress this year.

Lord Alliance of Manchester, CBE
9 May 2007

                          CHIEF EXECUTIVE'S REVIEW 2007

The results for the 52 weeks to 24th February 2007 demonstrate clearly that our
home shopping strategy to focus on niche customers and products has been
executed successfully with record results from every part of the business. Group
sales were £533.8m, up by 13.9% on last year, and operating profit from
continuing businesses increased by 26.5% to £76.4m.

Home Shopping

Home shopping sales rose by 14.0% to £523.8m. We anticipated a decline in the
rate of sales growth in the second half as the year on year comparatives became
more demanding but the momentum built up from the first half in fact
strengthened in the second half. Underlying sales growth of 11.4% for the year
was complemented by the acquisition of Gray & Osbourn in June 2006 which saw
sales of £12m during the period.

The most pleasing aspect of the results was the increase in sales from all
customer and product groups together with improved levels of customer service
and real reductions in major operating costs.

Customer Groups

We have seventeen different catalogue brands to which we recruit customers, each
of them focusing on a particular type of customer or product. For simplicity we
group them by age into younger, midlife and older.

The younger customer group comprises Fashion World, Classic Confidence and
Simply Be and, in aggregate, sales rose last year by 16% to £136m, the fastest
growth of all the groups, representing 26% of group sales. The highest sales in
this group are from Fashion World which serves value conscious customers in
their forties and saw double-digit sales growth. Simply Be remains the star
performer, with sales exceeding £50m for the first time, an increase of over
30%. Simply Be's success can be attributed to the provision of fashionable
clothing in all sizes through to size 34 (and occasionally up to size 38) for
the woman in her thirties who finds it hard to find clothes on the high street
to fit her. These are our highest spending customers and during the year we
increased the catalogue by 20 pages to accommodate larger ranges of lingerie and
footwear, all of which have been well received.

The largest and longest established group comprises our midlife brands which are
targeted at customers aged between 45 - 65 and account for £351m, or 67%, of
group sales. Despite the fact these brands are already well-established we saw
encouraging sales growth of 10%, with particularly strong performances from
Ambrose Wilson, Oxendales, Fifty Plus and Shapely Figures. These customers love
to shop from the comfort of their own home from our catalogues which provide a
full range of stylish, yet comfortable, clothing and footwear which is available
in a wide assortment of sizes and fittings, as well as a targeted range of home
and leisure merchandise.

The latest addition to the midlife group is Gray & Osbourn, an upmarket
ladieswear catalogue mainly selling high quality German brands. The business was
acquired in June 2006 for a consideration of £9.4m and has since performed to
our expectations contributing sales of £12m. The upmarket fifty plus customer
segment is the fastest growing part of home shopping and Gray & Osbourn
complements our acquisition in 2004 of House of Bath, which specialises in hard
to find items for the home and garden.

The third group of catalogue brands is our older group, targeting customers over
65, which contributed sales of £25m, up by 4%, principally through Heather
Valley and Special Collection, representing 5% of total sales.

The vast majority of the sales growth has come from our established database of
customers recruited in previous financial years. We have a database of over five
million customers who have placed an order in the last two years and during 2006
/7 the number of active customers rose by 3% and the average spend per customer
rose by 7%. The remainder of the sales growth was from newly recruited customers
who respond to product advertisements or mini-catalogues in womens magazines or
the national press, or are attracted by our television advertisements. In
addition we have recruited encouraging levels of new customers through the
internet search engines. The sales from all newly recruited customers rose by

Product Groups

Ladieswear sales, excluding Gray & Osbourn, increased by 10% to £270m,
accounting for 52% of total sales. Our customers want to dress more fashionably
but still comfortably and our buying team have managed this balance particularly
well this year. We are subject to the same fashion trends as the market as a
whole so we saw a strong performance from casual clothing in the first half with
the smarter, more tailored styles prevalent in the second half. Younger fashion
did well on the back of Simply Be's strength and knitwear performed strongly
throughout the year.

We specialise in offering our clothing in a wide range of sizes such that over
half our ladieswear sales are in size 20 or above, sizes which are difficult for
high street chains to manage effectively and profitably.

We also have an enormous range of options for corsetry and lingerie. For
example, we sell bras from size 32A right through to 54K in a selection of
styles and colours which is not matched by any other retailer. We have expanded
the styles suitable for our younger customers which has generated incremental
sales growth.

Wide-fitting footwear sales have seen a further 11% growth. One of the key
drivers of this growth was introducing a footwear range more suitable for our
younger customers, and the encouraging results mean this range will be expanded
in future seasons.

We have specifically focused some marketing campaigns to encourage more of our
customers to buy from product areas where they have not previously done so. From
our experience we know the more categories a customer purchases from the higher
their loyalty in the future and it is promising that these campaigns have been
successful. Currently only 11% of customers buy from all three of our clothing,
lingerie and footwear ranges and there is a strong growth opportunity in the
future to increase the level of cross-selling.

Menswear has continued its upward sales trend with an increase of 9%. The
fastest growth came from our younger styles and sportswear which we have
developed to complement our Premier Man ranges.

Sales of home and leisure products grew by 14% to £146m, well above our
expectations, and now account for 28% of total sales. There were particularly
strong performances from household textiles, electrical, furniture, homewares
and gifts. The success was partially derived from more pages being allocated to
home and leisure in the expanded mid-season mailings as a result of the lower
postage costs. In addition we had an extremely strong Christmas gift catalogue
due to increased pagination and improved presentation.

One of the core features of our business is the high number of product options
to provide our extensive choice of sizes and fittings. During the year we
increased the number of options by 22% to over 150,000. The management of such a
large option range within a multiplicity of catalogues, brochures and leaflets,
balancing the need for a high level of service with low levels of dormancy is
one of our key skills.

An encouraging feature of the sales performance was a 4% increase in the average
selling price, after a number of years of falling prices. The increase was down
to the mix of price points, as like for like selling prices were stable.


In order to maintain our position in the home shopping sector there have been
significant changes in the ways we communicate with our customers in recent
years. The most fundamental change has been the emergence of the internet. Our
online sales rose by a further 51% this year to £112m, representing 22% of total
sales, compared with 16% last year.

This increase is due to a number of factors. The growth of broadband penetration
is giving more customers the facility to use the internet and whereas young
customers were the early adopters we are now seeing growth rates which are
similar right across the age spectrum which plays very well for our target
markets. We continue to promote the internet to our customers through prominent
display of the website address on all catalogues and advertisements and offer an
introductory incentive for them to place their first order online.

Once customers go online we continue to see an uplift of about 25% in their
average order value, as they are able to switch seamlessly between all of our
many websites and access the entire group's product assortment and promotions.
In addition we are then able to include them in our email marketing campaigns.
During the year we ran over 200 email campaigns which generated further
incremental demand at a very low promotional cost.

Recruitment of new customers by sponsoring key words in the internet search
engine is now a core part of our recruitment campaigns and there is further work
we can do to optimise this activity.


The mailing of catalogues remains the key stimulus to customers ordering whether
they use the telephone, online or postal channels. We have further refined our
mailing programme this year. The main branded catalogues had additional pages
and increased sales by 7% but it was the mid-season mailings which saw the
largest increases from publications such as Classic Detail, Selections, New Now,
Christmas Gifts and the seasonal Value catalogues.

These mailings are mainly comprised of existing product lines, but by
introducing some new lines and changing catalogue formats and photography we can
create a very different feel to the new offer. Overall sales from these
mid-season mailings rose by 16% to £195m. We added more pages into the mailings
as a direct consequence of the new Royal Mail pricing structure introduced in
August 2006 which allows larger catalogues to be mailed cost effectively. These
drive a higher response level and keep our customers more active.

Incremental sales are also generated by our telemarketing activities on both
inbound and outbound calls, and during the year sales from these activities rose
by 20% to £41m.

Service and Costs

There has been a focus on improving the conversion of customer demand into net
sales. We delivered a higher level of stock availability during the year and saw
the rate at which customers return goods reduce by 0.7%, due to improved product
quality and fit. In addition the introduction of the new behavioural credit
scoring systems has reduced the proportion of credit rejects. The benefit of
these actions has been reflected in the lower level of marketing discounts and
incentives needed to stimulate sales and higher levels of customer satisfaction
reported by our internal surveys.

The increased frequency of mailings allows the progressive mark down of excess
stocks during the season. This resulted in higher in-season discounting but
reduced terminal stocks, leaving total stock levels at only a similar level to
last year on a like for like basis. However the main reason for the 1.2% decline
in the rate of gross margin is the higher bad debt charge resulting from the mix
of customers and changes to our credit policies to increase profitable sales,
together with reduced VAT relief on bad debts.

We have seen significant efficiencies in our operating costs, especially
carriage, marketing and payroll costs, and this has been the main contributor to
the 1.0% increase to 14.6% in the operating margin.


We have made a number of significant improvements to our operating
infrastructure. The £17m development of our second distribution centre at
Hadfield has seen one new warehouse completed before Christmas and two others
constructed for commissioning in the first half of 2007, including a bespoke
hanging garments warehouse. Additional call centre capacity has been secured
with an outsourced facility in Scotland and our call centre in Manchester has
had upgrades applied to all of the major operating equipment. In August 2006 we
transferred the management of our self-employed courier network, who deliver
about two-thirds of all our customer orders, to TNT Post as part of a 10-year
distribution agreement which should result in improved services at an attractive

The new generation of websites with many enhanced features are currently under
development and will start to be deployed throughout 2007.


Zendor, which provides home shopping services to other retailers, increased its
revenues by 9.9% to £10.0m and produced an operating profit of £0.1m, compared
with a loss of a similar amount last year. We have invested in additional
warehouse facilities, which will be further expanded during 2007, in readiness
for winning new business from a strong client prospect list.

Current Trading and Prospects

The growth trends established in 2006 have continued into 2007, with group sales
for the 10 weeks to 5th May 2007 up by 17.9%, or 14.0% on a like for like basis.
This growth is spread across all the customer and products groups and the
business has continued to increase the volume and variety of catalogues

We have a number of initiatives to widen the appeal of our catalogues whilst
continuing to develop our core selling propositions. We recently launched Simply
Living which is a more contemporary home and leisure offer for our younger
customers. In March 2007 we commissioned a television advertising and media
campaign to promote the launch of Simply Yours, with the strapline 'the above
average underwear company' targeting the younger, larger but more affluent
customer for our corsetry and lingerie ranges.

We are increasing the range of products available to our online customers,
including our version of fast fashion which will see twenty new lines promoted
exclusively on the internet in May 2007, although they may be included in the
catalogues later in the year. The internet model has changed dramatically from
the days when we merely replicated our catalogues online, to one where it is the
testing ground for new concepts.

The demographic trends for the customer population over 40 are very favourable
and we believe we are well-placed to deliver the appropriate products to the
different segments of this group through a portfolio of existing and new
catalogues which will appeal to both the value conscious and the upmarket
customer. We will endeavour to increase our market share through a wide
assortment of recruitment techniques which should increase our active customer
database as well as driving higher sales per customer.

I am confident that our strategy has the ability to deliver further growth in
the current financial year which will be for the 53 weeks to 1st March 2008.

Alan White
9 May 2007

                                                      52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                        Note                   £m                £m

Revenue - continuing operations           1                 533.8             468.7
Operating profit
Group operations                          1                  76.4              62.3

Share of joint venture operating loss                           -              (1.9)
Operating profit - continuing operations                     76.4              60.4

Investment income                                             2.7               2.8
Finance costs                                               (11.3)            (10.8)
Fair value adjustments to financial
instruments                                                  (2.4)              1.7
Profit before taxation                                       65.4              54.1

Taxation                                                    (18.5)            (15.5)
Profit for the year from continuing                          46.9              38.6
Loss for the year from discontinued
operations                                2                  (1.2)             (2.5)
Profit attributable to equity                                45.7              36.1
holders of the parent                            ----------------------------------

Earnings per share from continuing
operations                               5

Basic                                                       15.89p            13.11p
Diluted                                                     15.80p            13.06p

Earnings per share from continuing
and discontinued operations              5

Basic                                                       15.48p            12.26p
Diluted                                                     15.40p            12.22p


                                                      52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                               £m                £m

Exchange differences on translation of
foreign operations                                            0.4               (0.2)                   
Actuarial gains/(losses) on defined benefit
pension schemes                                               8.3               (4.9)
Tax on items recognised directly in equity                   (0.5)               1.5
Net income/(expense) recognised directly in                   8.2               (3.6)

Profit for the year                                          45.7               36.1
Recognised income for the year attributable
to equity holders of the parent                              53.9               32.5


                                                        24-Feb-07         25-Feb-06
                                                               £m                £m
Non-current assets
Intangible assets                                            30.9               22.0
Property, plant & equipment                                  68.9               61.0
Deferred tax assets                                          11.3               10.4
                                                            111.1               93.4
Current assets
Inventories                                                  54.9               52.5
Trade and other receivables                                 359.2              326.0
Derivative financial instruments                                -                0.7
Cash and cash equivalents                                    40.0               51.1
                                                            454.1              430.3
Total assets                                                565.2              523.7
Current liabilities
Bank overdrafts                                              (0.2)              (0.2)
Trade and other payables                                    (83.7)             (79.1)
Derivative financial instruments                             (1.7)                 -
Dividends declared                                          (79.9)                 -
Current tax liability                                       (18.6)             (14.9)
                                                           (184.1)             (94.2)
Net current assets                                          270.0              336.1

Non-current liabilities
Bank loans                                                 (143.8)            (143.8)
Retirement benefit obligation                               (27.7)             (34.4)
Deferred tax liabilities                                     (7.1)              (5.3)
                                                           (178.6)            (183.5)
Total liabilities                                          (362.7)            (277.7)
Net assets                                                  202.5              246.0

Share capital                                                29.6               29.5
Share premium account                                        10.3                9.2
Own shares                                                      -               (0.8)
Foreign currency translation reserve                          0.4                  -
Retained earnings                                           162.2              208.1
Total equity                                                202.5              246.0


                                                      52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                               £m                £m

Net cash from operating activities                           42.8               71.3

Investing activities
Purchases of property, plant and equipment                  (12.9)             (11.7)
Proceeds on disposal of property, plant 
and equipment                                                   -                0.2                        
Purchases of intangible fixed assets                         (8.0)              (8.1)
Acquisition of subsidiary                                    (7.3)                 -
Disposal of subsidiary                                          -                5.3
Interest received                                             1.0                1.4
Net cash used in investing activities                       (27.2)             (12.9)
Financing activities
Interest paid                                                (8.0)              (7.9)
Dividends paid                                              (19.6)             (17.4)
Repayment of bank loans                                         -              (26.2)
Repayment of obligations under finance leases                   -               (0.6)
Proceeds on issue of share capital                            0.5                  -
Proceeds on issue of shares held by ESOT                      0.4                0.2
Increase in bank overdrafts                                     -                0.1
Net cash used in financing activities                       (26.7)             (51.8)
Net (decrease)/increase in cash and cash
equivalents                                                 (11.1)               6.6          
Opening cash and cash equivalents                            51.1               44.5
Cash and cash equivalents at end of year                     40.0               51.1


                                                      52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                               £m                £m

Operating profit from continuing operations                  76.4               62.3
Operating loss from discontinued operations                  (1.7)              (2.2)

Adjustments for:
Depreciation of property, plant and equipment                 5.1                4.2
Loss on disposal of property, plant and equipment               -                0.2
Amortisation of intangible assets                             7.0                5.8
Share option charge                                           1.2                0.6

Operating cashflows before movements in working
capital                                                      88.0               70.9

Increase in inventories                                        -                (7.8)
Increase in trade and other receivables                    (32.5)               (2.2)
Increase in trade and other payables                         1.4                13.4
Pension obligation adjustment                                0.1                (0.2)
Cash generated from operations                              57.0                74.1

Taxation paid                                              (14.2)               (2.8)
Net cash from operating activities                          42.8                71.3


1. Analysis of revenue and operating profit           52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                               £m                £m

Analysis of revenue

Continuing operations
Home shopping                                               523.8             459.6
Fulfilment                                                   10.0               9.1
                                                            533.8             468.7
Analysis of operating profit

Continuing operations
Home shopping                                                76.3              62.4
Fulfilment                                                    0.1              (0.1)
                                                             76.4              62.3
2. Discontinued operations                            52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                              £m                £m
Door to door selling                                          4.6              16.1
TV rental                                                       -               0.8
Financial services                                              -               0.9
                                                              4.6              17.8

Operating (loss)/profit
Door to door selling                                         (1.4)             (2.3)
TV rental                                                       -              (0.1)
Financial services                                              -               0.2
                                                             (1.4)             (2.2)

Loss on disposal of discontinued
operations                                                   (0.3)             (1.2)
Finance costs                                                   -              (0.2)
Taxation                                                      0.5               1.1
Loss from discontinued operations                            (1.2)             (2.5)

3. Reconciliation of equity                           52 weeks to       52 weeks to
                                                        24-Feb-07         25-Feb-06
                                                              £m                 £m

Total recognised income for the period                       53.9              32.5
Ordinary dividends paid                                     (19.6)            (17.4)
B Share dividend declared                                   (79.9)                -
Issue of ordinary share capital                               1.2                 -
Purchase of own shares by ESOT                               (0.7)                -
Issue of own shares by ESOT                                   0.4               0.2
Share option charge                                           1.2               0.6

Total movement during the year                              (43.5)             15.9
Equity at the beginning of the year                         246.0             230.1
Equity at the end of the year                               202.5             246.0

4. Acquisition of subsidiary

On 30 June 2006 the group acquired the entire share capital of Gray & Osbourn Limited
for a total cash consideration of £9.4m. Its principal activity is direct home shopping
by catalogue.
The book value and fair value of net assets acquired are as follows:

Plant and equipment                                                             0.1
Inventories                                                                     2.4
Cash and cash equivalents                                                       2.1
Trade and other receivables                                                     0.4
Trade and other payables                                                       (3.2)
Current tax liability                                                          (0.3)

Net assets acquired                                                             1.5

Intangible brand asset arising on acquisition                                   7.9
Total consideration                                                             9.4
Satisfied by:
Cash                                                                            9.1
Directly attributable costs                                                     0.3
Cash acquired with business                                                    (2.1)
Net cash outflow                                                                7.3

5. Earnings per share

The calculation of earnings per share from continuing operations is based on the
profit for the year from continuing operations of £46.9m (2006, £38.6m) and the
weighted average number of shares in issue during the period of 295,160,000
(2006, 294,349,000).

The calculation of earnings per share from continuing and discontinued
operations is based on the profit attributable to equity holders of the parent
of £45.7m (2006, £36.1m) and the weighted average number of shares in issue
during the year of 295,160,000 (2006, 294,349,000).

For diluted earnings per share, the weighted average number of shares of
296,836,000 (2006, 295,526,000) has been calculated after adjusting for the
potential dilutive effect of outstanding share options.

6. Return of Value

At an extraordinary general meeting held on 21 February 2007 it was approved to
make a Return of Value of 27 pence per existing ordinary share, equivalent to
£79,894,699, to shareholders.

Under the terms of the Return of Value, shareholders received 19 new ordinary
shares for every 21 existing ordinary shares held together with 1 B share for
every 1 existing ordinary share held. Holders of the B shares were entitled to
receive a single dividend of 27 pence per B share payable on 12 March 2007.

Immediately after payment of the single B share dividend, the B shares
automatically converted into Deferred shares which were repurchased by the
company for the total sum of one penny.

7. Dividends

The final recommended dividend is proposed to be paid on 27 July 2007 to
shareholders on the register at the close of business on 29 June 2007.

8. Basis of preparation

The group's financial statements for the 52 weeks ended 24 February 2007 will be
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the EU.

Whilst the financial information included in this preliminary announcement has
been computed in accordance with IFRS, this announcement does not itself contain
sufficient information to comply with IFRS. The company expects to publish full
financial statements that comply with IFRS by 8 June 2007.

9. Non-statutory financial statements

The financial information set out above does not constitute the group's
statutory financial statements for the 52 weeks ended 24 February 2007 or the 52
weeks ended 25 February 2006, but is derived from those financial statements.

The financial statements for the 52 weeks ended 25 February 2006 have been
delivered to the Register of Companies. The auditors have reported on those
financial statements; their report was unqualified and did not contain any
statement under Section 237(2) or (3) of the Companies Act 1985.

The auditors have not reported on financial statements for the 52 weeks ended 24
February 2007, nor have any such financial statements been delivered to the
Registrar of Companies.

This report was approved by the Board of Directors on 9 May 2007.

                      This information is provided by RNS
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