Shares of Manchester-based fashion retailer N Brown Group rose about 7% on Thursday after it said it returned to profit in the first half of the year amid “good progress focusing on profitable digital growth.”
N Brown’s brands include JD Williams, Simply Be, Ambrose Wilson and Jacamo.
N Brown Group said that while revenue fell 5.4% to £432.9 million in the 26 weeks to August 31, the group posted first-half profit before tax of £18.8 million compared to a loss of £27.1 million for the same period last year.
The group said its transformation continues with 84% of its product revenue now digital.
N Brown CEO Steve Johnson said: “We announced our new strategy in May to return N Brown to sustainable profit growth and we have made good progress over the first half of the year.
“In particular, we have delivered on our strategy of growing digital revenue across Simply Be, JD Williams, Jacamo and Ambrose Wilson.
“This has been achieved by taking a more targeted approach to marketing and customer recruitment.
“The retail environment remains heavily promotional, but we are concentrating on continuing to improve our customer proposition and ensuring we operate as efficiently as possible, which has led to an increase of 4% in adjusted EBITDA for the period.
“We remain focussed on implementing our plans and the board’s full year expectations are unchanged.”
Analysts at Peel Hunt wrote: “Overall, N Brown is making solid progress, although we would like to see more details on brand KPIs to illustrate this.
“It trades on just 5x PER, the group’s rating does not take account of the solid profit base, market share position, or customer relevance.
“In the short term, earnings remain supported by efficiency savings, giving management time to demonstrate the improved product proposition.”