Plus-size clothing retailer N Brown Group PLC (LON:BWNG) got a lift today as it signed a partnership with supermarket giant Tesco PLC (LON:TSCO) even though it also reported a fall in full-year profits due to the costs of payment protection mis-selling compensation.
The FTSE 250-listed online and catalogue clothing retailer saw its pre-tax profit drop to £57.6mln for the year to March 4, down from £72.2mln a year earlier, impacted by an exceptional cost of £25.2mln relating to customer complaint redress in its financial services business.
The group said the cost comprised compensation to some customers due to an error in the previous calculation for redress, and an estimate of the likely future costs arising from complaints relating to financial services products sold in the past.
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The profit fall came despite N Brown’s full-year revenue rising to £900.7mln, up from £866.2mln a year earlier, boosted by a good performance from the group’s 'Power Brands' - JD Williams, Simply Be and Jacamo.
Revenue for the ‘Power Brands’ rose by 9.2%, helped by a 9.9% increase in active customers, additionally, the firm said, ladieswear revenue rose by 4.2%, while online revenue grew by 10%.
Tesco Direct to sell capsule collections for Simply Be and Jacamo
Under the new partnership deal, N Brown said Tesco will sell capsule collections for Simply Be and Jacamo on its Tesco Direct website and on a trial basis in a number of stores across Eastern Europe from May.
N Brown’s chief executive, Angela Spindler said: “Although it is early in our new financial year, performance so far has been encouraging and in line with our expectations.”
However, she added: "The macro-economic backdrop remains challenging for retail. Against this backdrop we remain vigilant over our core costs and efficiencies.”
The group maintained its final dividend at 8.56p, giving a pegged total pay-out of 14.23p as it continues with its "strategic transformation".
In lunchtime trading, N Brown shares topped the FTSE 250 leader board, adding 5.6%, or 12.75p to 239.25p.