N Brown surprises with 18% profit rise

N BROWN Group, the Manchester-based women's mail order group, has beaten City expectations by turning in a profit for the year to the end of February of pounds 22.5m, up 18.3 per cent. The company is also planning a one-for-one bonus share issue.

The better-than-expected performance comes on the back of a strong second-half increase in turnover, a pounds 2.1m reduction in interest charges due to lower rates and reduced borrowing levels, and a turnaround in the profitability of the non-core financial services and property services businesses.

Most of the increase in turnover, up 9.3 per cent to pounds 186.8m, results from existing customers placing orders more frequently, while only a small proportion of the increase results from attracting new customers.

According to Jim Martin, chief executive, the increase in orders from existing customers results from making garment sizing more reliable and by paying the postage costs of returned garments.

Ray Bowden, a stores analyst with Robert Fleming Securities, said: 'The company is paddling its own canoe. It's not being influenced by what is happening to others. The company is taking enough initiatives to underwrite continued growth at recent rates.'

N Brown has continued to develop its niche market - mail order clothes for women aged 45 to 60. However, the strongest growth came from catalogues aimed at women aged over 35, where sales increased 40 per cent on last year.

Mr Martin said N Brown was now in a position to make significant acquisitions. 'We are hoping to complement our core skills - essentially sourcing of goods and using marketing media - to complement another business,' he said.