N Brown has seen group revenue continue to improve in FY21. Though revenue was down by 8.8% in its third quarter, this marked an improvement from the 13.4% fall in Q2 and 21.9% decline in Q1, when the pandemic first hit.
According to the retailer, customer trends in its latest quarter also continued to reflect the Covid-19 environment. It experienced particularly strong demand for computing, with sales rocketing 115%, and gaming, which saw a 50% rise in sales. In addition, Home and Gift sales now comprise 42% of product revenue, compared to 32% in the same period last year.
Its five strategic brands saw a “modest” revenue decline of 1.4%, though the group noted that marketing costs were 40% lower than the prior year.
In addition, it saw growth in online customer accounts in JD Williams, Simply Be, Jacamo and Home Essentials in the period ended 2 January 2021.
However, the group said it is experiencing delays of two to three weeks for many of its stock deliveries, due to global container issues and cost pressure in the supply chain.
Its latest trading update also revealed that the group successfully completed its £100m capital raising and move to AIM, which has allowed it to repay all unsecured debt. FY21 year-end net debt is now expected to be in the range of £285m to £305m, down from £497.2m at the end of FY20.
Looking ahead, the group now expects to offset more than 80% of its absolute gross margin decline, driven by the pandemic’s impact on sales and bad debt provisions, through operational cost savings.
In light of this, it currently expects to deliver FY21 adjusted EBITDA of between £84m to £86m, while exceptional costs are expected to be around £10m.
Steve Johnson, CEO, said: “We remain focused on our number one priority of looking after our colleagues, whilst ensuring the business has the agility to respond to the ever-changing external environment and can continue to serve our loyal customers.
“We continue to move through the acceleration phase of our strategy; simplifying and strengthening our core brand proposition whilst improving our digital capabilities. This is generating continued momentum within the business, despite the difficult macroeconomic backdrop.”
He added: “We were pleased to recently complete our successful capital raise, which will help us continue the acceleration phase of our strategy and create a sustainable business delivering profitable growth over the long term.
“We remain mindful of the ongoing uncertainty in the UK retail environment, but as a digital business, we look forward to building on the unique strength of the Group’s brands in 2021 and beyond.”