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N Brown has seen its pre-tax profit plummet by 82.6% to £7.5m in FY23, down from £43.1m the year before, as the group grappled with a challenging market with inflation impacting both customer spend and its cost base.
On a statutory basis, the group fell to a pre-tax loss of £71.1m, down from a profit of £19.2m in FY22, which the group in part attributed to a final Allianz litigation settlement and non-cash impairment of £53m.
As well as a fall in profits, the group also reported that group revenues fell by 5.3% to £677.5m, down from £715.7m the prior year. Product revenues were down by 6.9% to £433.4m, while Financial Services revenues were down by 2.4% to £244.1m.
Currently, the group said previously guided softer product revenue seen in Q4 FY23, which was down 17.8% year-on-year, has continued into the first quarter of the new year, following a strong Q1 FY23 and poor early Spring weather.
It also warned that it expects the challenges of a high inflationary environment and low consumer confidence to remain throughout FY24, and currently expects full-year product revenue to decline at a slightly improved rate to that seen in FY23.
CEO Steve Johnson said: “We have remained adaptable to the trading environment which became more challenging during the year, as inflation impacted both our customers and our cost base. Although volumes softened, we maintained a disciplined approach to trading, with a particular focus on upholding margin despite a promotional backdrop.
“We continued to make strategic progress despite these challenges, increasing investment during the year, and we successfully launched our new mobile-first website for Simply Be. I would like to thank every single one of our colleagues for their role in achieving this progress, through their commitment to serving our customers and supporting our vision of championing inclusion.”
He added: “We are expecting the weaker consumer confidence to continue weighing on our performance before we see a return to growth and are therefore keeping a tight control of costs. We remain confident in our strategy and are more focused than ever on the transformational priorities which will deliver the biggest benefits, including new websites for Jacamo and JD Williams, and the delivery of our new financial services platform.”
