Listed N Brown plots £100m raise
Posted on November 5, 2020 by Jonathan Symcox
Fashion retailer N Brown plans to raise £100 million for growth opportunities despite revealing a fall in half-year revenue and profits.
The Manchester-headquartered group plans to delist from the premium segment of the London Stock Exchange and list on the alternative AIM market alongside a share placing intended to raise the investment.
Revenues for the six months to 29th August were £356.7m, down 18 per cent on the same period in 2019, while adjusted EBITDA was £48m (down 17%) and adjusted profit before tax was £22.6m (down 29%).
Following a profit warning in January, the firm’s CFO was replaced amid a senior management shake-up. It then experienced a significant decline in business in March as COVID-19 hit before improving through to the end of August.
The firm’s overall net debt stands at £411.1m, reduced by 17 per cent on the 2019 figure.
It said 90 per cent of its revenues are now generated from digital while 65 per cent of its products are now designed in-house.
N Brown, which also launched a home essentials website in April, said it had identified a “clear opportunity to strengthen the balance sheet and accelerate profitable growth”.
“Having restructured the business and transitioned to more than 90% of revenues from digital, we now see a clear opportunity to capitalise on various industry drivers, not least the increasing trend towards online retail, and further improve our customer proposition,” said CEO Steve Johnson.
“The proposed capital raise will give us the firepower to invest further in our digital capabilities and accelerate our growth strategy, whilst significantly strengthening the group’s balance sheet to provide us with ongoing flexibility and a strong platform from which to deliver returns for all of our shareholders.
“We continue to transform the shape of N Brown against the uncertain backdrop of COVID-19, and I am hugely grateful to all our colleagues who are enabling us to do this.
“Our core, streamlined fashion brand proposition, supported by ever-more sophisticated digital capabilities, have driven a recovery in product sales since the initial impact of the pandemic.
“Whilst we are mindful of an uncertain UK retail environment, we are confident we can continue to build on the unique strength of the group’s brands. We remain focused on creating a sustainable business delivering profitable growth over the long term.”