The board remains confident in achieving the group’s medium-term objective of delivering sustainable profitable growth.
N Brown Group PLC (AIM:BWNG) expects to report full year adjusted underlying earnings (EBITDA) towards the lower end of its guidance range.
The home shopping firm said in its fiscal third quarter trading update it expects to report adjusted EBITDA4 between £93mln and £96mln, with the pedestrian performance reflecting reflecting the online market conditions and a slightly higher level of project spend now being expensed rather than capitalised.
The group said it now expects full-year capital expenditure of around £22mln, which is lower than previous guidances, net of the project expenditure that is now being expensed rather than capitalised – the difference being expensing is applied in one hits when expenditure takes place whereas with capitalising the cost occurs over a longer period of time.
Product revenue in the 18 weeks to 1 January 2022 totalled £181.2mln, down 3.5% year-on-year while group revenue was 3.3% lower at £267.6mln.
On the plus side, total active customers have returned to year-on-year growth, reflecting both improved customer retention rates and new customer acquisition, N Brown said.
Total active customers ended the period at 2.91mmln, up from 2.87mln at the end of the second quarter, with the retailer’s Simply Be and Jacamo offerings boasting active customers at record levels.
“The business has performed resiliently over the peak period and our colleagues have worked tirelessly to deliver for customers in challenging circumstances,” claimed Steve Johnson, N Brown’s chief executive.
“Against the backdrop of Covid uncertainty, a volatile consumer environment and well-documented supply chain issues, the continued growth of our strategic brands has been particularly pleasing, as has a return to growth in active customers. We are now seeing more people than ever shopping with Simply Be and Jacamo. JD Williams is also resonating well with customers, particularly on the back of our successful partnerships with Amanda Holden and Davina McCall.
“We have continued to execute on our plan and, looking ahead, will continue our strategic investment to transform the business, supported by a robust balance sheet and a strengthened executive team,” he added.
Shares in N Brown fell 6.6% to 38.66p on the back of the soft earnings guidance.
Read More: N Brown Group PLC slides as it says earnings will be at the lower end