Brown (N.) Group PLC BWNG Full Year Results Announcement

  Brown (N.) Group PLC (BWNG) - Full Year Results Announcement

RNS Number : 4220C
Brown (N.) Group PLC
01 May 2012

01 May 2012

                              N Brown Group plc


                        FULL YEAR RESULTS ANNOUNCEMENT

                       FOR THE YEAR ENDED 3 MARCH 2012

N Brown Group plc (LSE: BWNG), the internet and catalogue home shopping
company, today announces its full year results for the 53 weeks ended 3 March


· Total Group revenue                                     £753.2m +4.8%
· Pre-tax profit                                           £96.9m +2.5%
· Adjusted earnings per share                              28.91p +7.0%
· Full year dividend                                       13.03p +5.0%
· E-commerce sales                                          £377m  +16%
· Sales from Simply Be USA                                  £4.8m +500%
· Figleaves deliver first ever profit in 13 years
· Like-for-like sales for the 8 weeks ended 28 April 2012         +0.6%
· Confident outlook for 2012

Lord Alliance of Manchester, CBE, Chairman, said:

"We are pleased to announce another robust set of results despite a  difficult 
trading environment where our customers  have seen their discretionary  income 
become  increasingly  hard-pressed.  We  have   continued  to  focus  on   our 
multi-channel strategy, investing in our online trading platform, whilst  also 
expanding our international activities.

Although we  do  not expect  the  market  to materially  improve,  we  believe 
consumer confidence will begin to pick up later this year and we are confident
that our strategy will continue to deliver in 2012.

Alan White, Chief Executive, added:

"We have delivered a solid performance for the year, driven by the development
of multi-channel  trading  and new  product  ranges. The  highlights  include 
increased online penetration,  strong growth  in our younger  titles and  our 
expansion into stores and international markets. We are particularly  pleased 
to see Figleaves delivering its first ever profit, good sales growth from High
& Mighty and by the performance of our Simply Be, Marisota and Jacamo brands.

Looking ahead, our multi-channel  strategy, combined with  our focus on  niche 
customers and products and the flexibility of our business model will look  to 
overcome  the  challenging  macro-economic  conditions.  The  Board   remains 
confident that we will continue to make progress this year."


For further information please contact:

N Brown Group plc
Alan White, Chief Executive  On the day: 0207 074 1800
Dean Moore, Finance Director Thereafter: 0161 238 2202
Website :
Kreab Gavin Anderson
Fergus Wylie / Clotilde Gros 0207 074 1800

Chairman's Statement

We are pleased to have  delivered a solid financial  outcome for the 53  weeks 
ended 3 March 2012, especially in  light of the difficult economic  conditions 
for our customers. For the first time online sales have reached 50% of  total 
sales and we have made good progress  in developing a growth platform for  the 

Financial Results

Total  group   revenue  increased   by  4.8%   to  £753.2m.   Excluding   the 
non-comparable periods for newly opened  stores, the acquisition of  Figleaves 
and the 53^rd  week, like-for-like  sales grew  by 1.6%.  The combination  of 
rising input prices  and falling disposable  income inevitably subdued  demand 
from our  hard-pressed customers,  so  as anticipated  we reduced  prices  and 
increased promotional  activity  to stimulate  demand.  This led  to  a  0.8% 
decline in the rate of gross margin to 53.0%.

Operating profit is slightly down by  £0.6m to £102.0m, after absorbing  £5.2m 
of  losses   on  opening   the  Simply   Be  concept   stores  and   expanding 
internationally (2011, £2.3m).  However it  does include the  benefit of  the 
53^rd week this  year which has  contributed revenue of  £12.9m and  operating 
profit of £2.9m.  Profit before  taxation is up  by 2.5%  to £96.9m  (2011, 
£94.5m)  although,  once  the  fair  value  adjustments  to  foreign  exchange 
contracts are excluded, the profit before taxation is £95.6m (2011,  £98.2m). 
Adjusted earnings per share are up by 7.0% to 28.91p, benefitting from a lower
tax charge,  primarily due  to the  utilisation of  tax losses  acquired  with 
Figleaves. The board is proposing a  final dividend of 7.74 pence per  share, 
up 5.0% on last year and in  line with the increase in the interim  dividend. 
This gives a total dividend for the year of 13.03 pence, covered 2.2 times.

Net borrowings at  3 March  2012 were  £192.5m (2011,  £180.9m). As  expected 
there was a higher  level of capital expenditure  to drive internet sales  and 
set up the  pilot Simply  Be stores. Net  finance costs  have increased  from 
£4.4m to £6.4m, covered 16 times by operating profit. The rise is due to  the 
higher margin payable  on £350m  of bank  facilities which  have been  renewed 
during 2011 for a further five years.  Gearing has fallen from 50% to 48%  on 
net assets which have risen by 11.6% to £402.3m.

Trading Highlights

During the year the key trading highlights have been:

· Online sales passing the 50% share of total sales, following 16% growth
to £377m during the year.

·  Managing  and  flexing  the  marketing  investment  across  our  brand 
portfolio based on the results  of recruitment campaigns, mailings and  online 
promotions. The strongest growth was from  the Jacamo, Marisota and House  of 
Bath customer brands.

· Seeing the turnaround plans in  Figleaves and High & Mighty  delivering 
results. Figleaves made its first ever profit in 13 years of trading and High
& Mighty  opened 3  new stores  whilst significantly  reducing its  losses  to 

· Growing the Simply Be brand in the USA where sales increased from £0.8m
to £4.8m. We deliberately slowed the rate of customer growth in Germany until
we had reduced the  rate of returns  which improved by  1 percentage point  to 

· Opening two Simply Be concept stores, and four more since the year-end,
to  test  whether  a  full   multi-channel  operation  can  drive   sufficient 
incremental sales to justify the investment and fixed costs. We will evaluate
the performance of these stores towards the end of 2012 based on the uplift of
sales from all channels in the postcode region around the store.

· Focusing on our strong product propositions in footwear and menswear to
deliver growth of 6%  and 15% respectively. The  sales of ladieswear were  up 

Current Trading and Outlook

Sales for the 8 weeks to 28 April 2012 are 1.0% up on last year and 0.6% up on
a like-for-like basis.  The year-on-year weather  conditions and the  earlier 
Easter break make comparisons complicated  but overall the pattern of  trading 
from the second half is continuing,  with customers reluctant to spend  unless 
the product or promotional offer  is compelling. Consumer confidence  remains 
fragile but we believe the  situation will improve in  the second half of  the 
year as  inflation  and  income  growth  become  more  balanced  and  our  own 
comparatives become softer.

In a weak  economic environment  any improvement to  our competitive  position 
must therefore come  through our  own actions. We  believe that  we have  the 
required plans and platform in place for growth in these market conditions.

We will be offering customers lower prices  in the autumn and will look to  be 
more aggressive  on key  value lines.  Our stock  levels are  currently  well 
balanced and  this will  reduce the  need  for the  level of  discounting  and 
promotional offers that were  required in the second  half last year to  clear 
some excess stocks. Our online trading strategy still has much further to  go 
and we can exploit the features and functionality we have already developed to
deliver rich and relevant content, which will drive both incremental sales and
cost savings.

We recognise the increasing importance of strong brands in the online channel,
high street stores and international markets and we will be concentrating  our 
marketing spend on fewer of our brands than has previously been the case.

Customer recruitment was strong in the second half and we are investing  extra 
resources this  year to  support  this growth,  in  addition to  campaigns  to 
reactivate more of our  lapsed customers. One of  the aims of the  multimedia 
Simply Be stores is to reach customers who are in our target market but prefer
to shop on the high street, rather than online, and early indications are that
a high proportion of store visits are from women who have not shopped with  us 

International expansion is another key  strategic development. We will  focus 
on the USA,  and we  have now appointed  local digital  marketing agencies  to 
boost Simply Be's online  recruitment and social  media activities there.  We 
will also trial both Marisota and Jacamo, initially on the Simply Be  website, 
and look to boost Figleaves' international sales.

Market conditions remain challenging but we have a competitive proposition for
the middle-aged and plus-size customer groups, which have excellent  long-term 
growth prospects. The  continuing development of  our unique product  ranges, 
online trading  capability and  the expansion  into stores  and  international 
markets should keep N Brown in the leading group of clothing retailers.

The ability of the business to rapidly adapt to changing market  circumstances 
is one of its enduring qualities and  I would like to thank all  stakeholders, 
including  suppliers  and  the  trade  union,  for  their  contribution,   but 
especially all our  staff who have  been both innovative  and hard working  to 
deliver record levels of service quality to our customers throughout the year.

Lord Alliance of Manchester, CBE

01 May, 2012

Chief Executive's Review

The group  has continued  to make  progress this  year despite  a  significant 
decline in our customers' discretionary spending power. This has necessitated
active management of  our selling  prices, marketing  investment and  overhead 
base across all of our brands portfolio to deliver this outcome.


Revenue growth has been delivered through  the core UK home shopping  business 
supplemented by international expansion  and new store  openings. For the  53 
weeks to 3 March 2012 revenue is up  in total by 4.8% to £753.2m, and by  1.6% 
on a like-for-like basis which excludes the impact of newly opened stores, the
acquisition of Figleaves in June 2010 and the 53^rd week.

Customer Groups

Target Age Revenue £m % Change
30-50      271        13
Over 50    482        1
           753        5

N Brown Group has a very distinctive customer base, comprising over 6  million 
individuals with an  average age  of 58,  and an  average dress  size of  18. 
During the year we  saw a small  decline in the  number of active  established 
customers but a combination of higher selling prices and promotional campaigns
led to a 4% increase in average sales per customer. Sales from new  customers 
rose by 2% for the year as  a whole, due to improved recruitment campaigns  in 
the second half.

Under 50 Customer Group

The brands in this group grew at a  faster rate than those targeted at the  50 
plus segment, due to the development of Simply Be, Jacamo and Figleaves.

Simply Be is the largest  single brand in the group  with sales of over  £100m 
from all channels and geographies. The focus is on fashionable and flattering
clothing in sizes 14-32 specifically designed for the plus-size woman.  These 
customers often have difficulty finding clothes to fit in other retail stores,
whether in the UK or elsewhere, which is why we chose the Simply Be brand  for 
both our international expansion and high street store trial.

Jacamo is targeted  at the  brand-conscious thirty-something  male who  either 
wants the convenience of online shopping or struggles to find branded clothing
in his size. Good response rates to the improved product offer, coupled  with 
significant numbers of new customers, led to sales increasing by over 50%.

Figleaves has had an excellent year moving  into profit for the first time  in 
its 13  year  history after  radically  pruning  its cost  base.  Sales  from 
Figleaves' own brand rose by 20% including the new FGL menswear range, and the
range extensions allied to lingerie, such as swimwear and pyjamas.

The other major  brand in this  section, Fashion World,  whose customers'  are 
primarily from  the lower  socio-demographic groups,  had flat  sales year  on 

50 Plus Customer Group

The midlife and older customers aged 50 and above suffered from a  combination 
of high inflation, particularly for food and energy costs, and a low return on
their savings. Two thirds of these customers are over 65 and have  relatively 
fixed incomes. Consequently there was  a contrasting performance between  the 
brands targeted at  the younger end  of this category,  such as Marisota,  and 
those at the older end, such as Heather Valley and Special Collection.

Marisota increased its revenues by 24%  targeting the customers aged about  50 
with a catalogue and website focused on solutions for problems with the fit of
clothing and footwear. For example we  promote our 'Magi' range which,  using 
the latest design and fabric technologies, can create a smoother body  shape. 
Similarly we have developed  our 'Legroom' footwear range  which now has  five 
different calf fittings for long-line ladies boots. The same is also true  of 
our lingerie range which focuses on the fitting and comfort problems customers
have, which, as  an example,  led to the  development of  the world's  largest 
strapless bra, available up to size 48K.

Our longest  established  catalogue  is distributed  under  the  JD  Williams, 
Ambrose Wilson, Oxendales, Fifty Plus and That's My Style brands which account
for 39% of group  revenue. Sales were slightly  down even though the  average 
sales per  customer  were  up .  However  there  was a  small  proportion  of 
customers who resisted all  our promotional activity,  and we will  especially 
target them in 2012 to reactivate their purchasing activity.

The group of brands targeting  customers with an average  age of 70 had  mixed 
fortunes, and in aggregate sales were  down by 7%. Gray & Osbourn,  targeting 
the more  affluent  60+ customer,  increased  full margin  sales  but  overall 
revenue was lower  as reduced  stock levels  led to  fewer discounted  sales. 
House of Bath,  which sells  unusual items  for the  home and  garden, had  an 
excellent year with sales up by 12%, and Julipa also did well.

Product Groups

During 2011 the group was operating in product sectors which were amongst  the 
most challenging in the retail marketplace. The plus-size clothing sector did
not grow  at all  and the  sales of  home and  leisure goods  were also  weak, 
particularly for big ticket items. Against this backdrop we can be reasonably
satisfied with a 1.6% like-for-like sales growth.

Ladieswear accounts for about half the group's  revenue, and was up by 2%  for 
the year as a whole. Due to the  cotton price bubble in 2010 input costs  for 
clothing in  2011 were  up by  9% on  average, which  we passed  through  into 
selling prices. Customers were only being enticed to purchase if the  product 
or the price was compelling. Consequently we had strong sales on lines  where 
we had  new designs  or product  with  unique features  and the  designer  and 
celebrity endorsed ranges but sales of basic casual clothing were down.

Within ladieswear  lingerie  sales  were  up  7%,  partly  due  to  Figleaves' 
performance, but we also took market share in bras, swimwear and nightwear.

Footwear saw  sales growth  of  6%. Core  footwear  sales benefited  from  an 
improved range of styles and fittings but we also had strong growth from men's
footwear, sports footwear and Viva La  Diva, our online pure play which  sells 
third party brands as well as our own.

Menswear continues to be our fastest  growing product sector. Revenue was  up 
by 15%, primarily driven by the success of Jacamo and the expansion of High  & 
Mighty's store network. We have recruited Freddie Flintoff as Jacamo's  brand 
ambassador and his range is selling well. More branded menswear suppliers are
manufacturing their  ranges  in  larger sizes,  exclusively  for  Jacamo.  In 
addition both Premier Man  and Williams and  Brown are doing  well, as is  our 
sportswear range.

Home and  leisure  sales  were  up  by 5%  in  total,  although  there  was  a 
significant variation within the sub-ranges. Gifts and toys were 18% up as we
promoted the Brilliant Gift website throughout  the year, rather than just  at 
Christmas. Electrical  and homewares  also  had good  growth, helped  by  the 
availability of credit  on customers' personal  accounts. However  furniture, 
bedding and home decor were all down as customers deferred home improvement.


Online sales are now  the majority of  the group sales, as  a 16% increase  in 
online sales to £377m  enabled us to pass  the 50% milestone. The  increasing 
proportion of new customers recruited on our websites, the improved quality of
our email campaigns and improved website functionality all contributed to this
growth. We are the market leader  for online sales for plus-size  womenswear, 
menswear for the fifty plus age group and many other categories. Sales  from 
product lines only available online, most of which are shipped directly to our
customers by the suppliers, increased by 29%

This increase in online sales improves profitability as web orders have a  25% 
higher value than telephone orders and  costs reduce in the contact centre  as 
volumes fall.  Telephone  order  volumes  have  fallen  17%  this  year,  and 
telephone enquiries and  payment calls are  down 21% as  customers' switch  to 
using our redesigned online 'My Account' facility.

Despite the increasing share of all  retail sales transacted on or  influenced 
by the  web  the  vast majority  of  clothing  and footwear  sales  are  still 
conducted in high street stores. This  is even true for the plus-size  market 
which led us to trial some Simply Be stores to see if we could profitably gain
more market share for our most  fashionable clothing range. We opened  stores 
in Liverpool and Bury in autumn 2011 and in-stores sales totalled £0.7m by the
year-end. We will evaluate the stores based  on the uplift of sales from  all 
channels  in  the  post  codes  influenced  by  the  store  location,  Early 
indications are that there is  an uplift in the  level of online purchases  in 
the catchment area.  In the last  month we have  opened stores in  Gateshead, 
Teesside, Leicester and Doncaster and a Manchester store is scheduled to  open 
in September.  This  small portfolio  of  stores  is focused  on  five  major 
shopping centres,  including one  out-of-town retail  park, plus  two  smaller 
towns so we can identify the ideal type of location, assuming further  capital 
investment is justified by incremental sales.

High & Mighty was acquired out of administration in late 2009. Since then  we 
have  relocated  the  business  to  Manchester,  re-platformed  the   website, 
relocated four stores, refurbished seven stores and opened six new stores,  of 
which three  were new  in 2011/12.  Total sales  grew by  17% to  £8.8m  with 
like-for-like sales up by 7%. Losses shrank from £0.8m to £0.2m and we  would 
expect to move into profit in the current year.


We believe Simply  Be's fashionable  plus-size clothing range  will appeal  to 
international customers, and have so far targeted Germany and the USA.  Total 
sales were £8.4m (2011, £4.2m) with  losses of £4.8m (2011, £2.3m). Our  key 
target is the USA as the market opportunity for us is significant and the  key 
performance indicators to  date are  favourable, with high  gross margins  and 
returns rates  below 30%.  Customer recruitment  has been  primarily  through 
catalogue  mailings  to  selected  customer  lists,  supplemented  by   online 
recruitment through paid search  and social media.  The appointment of  local 
digital agencies took longer  than originally anticipated but  they will be  a 
key lever of growth in 2012.

Germany's performance has previously been held  back by high rates of  product 
returns. A number of initiatives were implemented which have brought the rate
down by 1% to 60%, although this is  still too high. We limited the level  of 
customer recruitment whilst we were making these changes.

We also have  international sales  for Oxendales  in Ireland,  a market  which 
continues to be very challenging, and for Figleaves which has over 20% of  its 
sales from overseas and an opportunity to grow them further.

Gross Margin and Credit

The overall rate of gross margin fell  by 0.8% to 53.0% with a reduced  margin 
on product sales offset by an increase in net consumer credit income.

The sales of  ladies clothing and  footwear were impacted  by the mild  autumn 
weather and  resulted in  excess stocks  of cold  weather merchandise.  As  a 
consequence we offered more aggressive promotional discounts to customers  who 
had not ordered and marked down  prices to reduce inventory levels.  Although 
this reduced the rate of gross  margin by 2.2% we did successfully  reactivate 
some dormant customers  and limited  the increase in  year-end inventories  to 
only 5.8%.

Income derived from our customers' credit accounts performed well with revenue
up 11.9% to £218.4m. Changes to credit policies and processes gave  customers 
the options of paying their accounts off over a slightly longer period.  This 
increased the gross margin  rate from financial services  income by 1.4%  with 
the increased interest income partly offset by a rise in the rate of bad  debt 
charge, which increased  as a percentage  of revenue from  7.4% to 7.7%.  The 
arrears profile of the debtor book has improved during the year.


The  business   has  successfully   controlled  costs   during  volatile   and 
inflationary trading conditions. An increase  in average order values led  to 
improved collation and a lower volume of parcels despatched. This offset much
of  the  increases  for  fuel  and  payroll  limiting  the  overall  rise   in 
distribution costs to 3.0%. Selling and administration costs rose by 4.8%, in
line with  group turnover,  but  this included  heavy investment  in  customer 
recruitment, both at home and abroad, and high rates of inflation for postage,
paper and print.

Customer Service

Exemplary customer service is essential in difficult economic circumstances to
maintain customer loyalty and in this  respect we had an excellent year.  The 
ratio of enquiries to orders improved further and we had the fastest  delivery 
and the lowest ever levels of claims for goods not received. In addition  our 
bi-annual surveys of customer satisfaction showed record approval levels.

Outlook and Current Trading

The strategic plan for the business  is designed to develop our  multi-channel 
trading performance  in  the  UK  which  will  then  provide  a  platform  for 
international expansion. There are several components to this strategy  which 
will be our key areas of focus during 2012/13.

Within the core home shopping business we will be concentrating our  marketing 
investment on  the key  ladieswear  and menswear  brands plus  the  speciality 
propositions. We  will  improve  our  online  trading  capability  and  drive 
incremental sales which  will allow us  to reduce our  mailing contacts.  Our 
websites will be  adapted to capitalise  on the exponential  growth of  online 
access from  mobile devices.  We will  review the  attractiveness of  further 
store openings relative  to the  capital outlay  and we  are testing  Jacamo's 
menswear on the mezzanine floors of  two Simply Be stores. Similarly we  will 
testing the international potential of  Marisota and Jacamo within the  Simply 
Be website in the USA.

Traditionally we have dealt with customers who regarded it as normal to open a
credit account even if it was just to try on the clothing before purchase. As
the online  audience becomes  more diverse  in its  age and  socio-demographic 
spread we  will  be testing  simpler  up-front payment  options  to  determine 
whether this profitably increases the size of our customer base. We will also
be providing more delivery options for our customers.

Revenue for the 8 weeks ended 28 April  2012 shows an increase of 1.0%, and  a 
like-for-like increase of 0.6 %, excluding  the sales from stores not open  at 
this time  last year.  Consumer confidence  is still  low but  the  situation 
should improve later in the year as inflation and income growth rates start to
converge. The  recent spate  of  retail casualties  will  also free  up  some 
capacity in the market sectors in which we operate.

We have seen encouraging results  from our Spring recruitment campaigns  which 
will help  to rebuild  the 3%  reduction in  the active  customer database  we 
experienced last year. We  also have a series  of reactivation campaigns  for 
lapsed customers planned.  The second half  of last year  saw high levels  of 
discounting activity  to clear  excess stocks  both by  ourselves and  in  the 
sector as a whole. We  have bought less stock this  year now that lead  times 
have returned to normal from our suppliers and we expect a benefit in the rate
of gross margin in the second half. The reduction in cotton and fabric prices
will result in lower input prices in the  autumn which we will pass on to  our 

Our  online  capability   was  strengthened   last  year,   both  in   systems 
functionality and personnel,  and this will  enable us to  trade our  websites 
even more effectively this year. We have  already seen an increase of 11%  in 
our online sales in March and April compared with last year.

The clear focus on  our targeted customer and  product groups, traded  through 
multiple channels and to a wider geographic audience, supported by more credit
and service options, will drive the business forward in the coming year.

Trading was extremely tough in 2011 but everyone in the business has risen  to 
the challenges facing them.  This resilience and  our focused strategic  plan 
leave N Brown Group well placed to make further progress this year.

Alan White, Chief Executive

01 May, 2012

Unaudited condensed consolidated income statement

                                          53 weeks to          52 weeks to
                                             03-Mar-12             26-Feb-11
                            Note                  £m                   £m
Revenue                         4    753.2     718.8
Operating profit                4    102.0     102.6
Investment income                                  4.3                   4.1
Finance costs                                   (10.7)                 (8.5)
Profit before taxation and fair
value adjustments to financial
instruments                         95.6     98.2
Fair value adjustments to                                     
financial instruments           5  1.3                 (3.7)
Profit before taxation                            96.9                  94.5
Taxation                        6               (15.9)                (22.8)
Profit attributable to equity
holders of the parent                             81.0                  71.7
Adjusted earnings per
share                           7
Basic                                            28.91  p              27.02 p
Diluted                                          28.88  p              26.98 p
Earnings per share              7
Basic                                            29.28 p              26.04 p
Diluted                                          29.24  p              26.00 p

Unaudited condensed consolidated statement of comprehensive income

                                          53 weeks to         52 weeks to  
                                             03-Mar-12            26-Feb-11  
                                                   £m                  £m  
Profit for the period               81.0    71.7  
Other items of comprehensive                                                 
Exchange differences on
translation of foreign                                                       
operations                        (0.2)                (0.6)
Actuarial losses on defined                                                  
benefit pension schemes                          (6.2)        (2.3)
Tax relating to components of                                                
other comprehensive income         1.6   0.6
                                                (4.8)                (2.3)  
Total comprehensive income for
the period attributable to                                                   
equity holders of the parent                      76.2                 69.4

Unaudited condensed consolidated balance sheet

                                               03-Mar-12         26-Feb-11
                                                     £m               £m
Non-current assets
Intangible assets                                   62.8              52.2
Property, plant & equipment                         67.2              69.1
Retirement benefit surplus                            -               3.3
Deferred tax assets                                  1.9               3.5
                                                   131.9             128.1
Current assets
Inventories                                         82.6              78.1
Trade and other receivables                        522.0             490.8
Derivative financial instruments                      -               -
Cash and cash equivalents                           57.5              49.1
                                                   662.1             618.0
Total assets                                       794.0             746.1
Current liabilities
Bank loans and overdrafts             -            (40.0)
Trade and other payables                         (106.6)           (114.5)
Derivative financial instruments                   (0.1)             (1.4)
Current tax liability                       (22.9)   (28.8)
                                           (129.6)    (184.7)
Net current assets                       532.5   433.3
Non-current liabilities
Bank loans                                       (250.0)           (190.0)
Retirement benefit obligation                      (1.0)               -
Deferred tax liabilities                          (11.1)            (11.0)
                                                 (262.1)           (201.0)
Total liabilities                                (391.7)           (385.7)
Net assets                                         402.3             360.4
Share capital                                       31.3              31.0
Share premium account                               11.0              11.0
Own shares                                         (1.5)             (1.2)
Foreign currency translation reserve                 1.9               2.1
Retained earnings                                  359.6             317.5
Total equity                                       402.3             360.4

Unaudited condensed consolidated cash flow statement

                                            53 weeks to         52 weeks to
                                               03-Mar-12            26-Feb-11
                                                     £m                  £m
Net cash from operating activities                 56.5                 57.4
Investing activities
Purchases of property, plant and
equipment                                          (5.7)                (6.4)
Purchases of intangible assets                   (19.2)               (15.7)
Acquisition of subsidiary          -               (10.3)
Interest received                                   0.1                 0.2
Net cash used in investing
activities                                        (24.8)               (32.2)
Financing activities
Interest paid                                     (7.9)                (4.2)
Dividends paid                                   (35.0)               (31.5)
Increase in bank loans                             20.0                  -
Purchase of shares by ESOT                        (1.0)                (0.8)
Proceeds on issue of shares held
by ESOT                                              0.6   0.5
Net cash used in financing
activities                                        (23.3)               (36.0)
Net increase/(decrease) in cash
and cash equivalents                                 8.4               (10.8)
Opening cash and cash equivalents                  49.1                 59.9
Closing cash and cash equivalents                  57.5                 49.1

Reconciliation of operating profit to net cash from operating activities

                                            53 weeks to         52 weeks to
                                               03-Mar-12            26-Feb-11
                                                     £m                  £m
Operating profit                                 102.0    102.6
Adjustments for:
Depreciation of property, plant
and equipment                        7.6   7.8
Amortisation of intangible assets   8.6   6.9
Share option charge                 2.2   2.1
Operating cash flows before
movements in working capital           120.4                119.4
Increase in inventories                           (4.5)               (12.0)
Increase in trade and other
receivables                                       (30.7)               (29.8)
(Decrease)/increase in trade and
other payables                                     (7.5)   3.7
Pension obligation adjustment                     (1.6)                (7.4)
Cash generated by operations                       76.1                 73.9
Taxation paid                                    (19.6)               (16.5)
Net cash from operating activities   56.5    57.4

Unaudited condensed consolidated statement of changes in equity


                    Share        Share                            Retained
                  capital      premium   Own shares      reserve  earnings   Total
                      £m          £m          £m           £m        £m     £m
Changes in
equity for
the 53 weeks
to 03 March
Balance at 26
February 2011        31.0         11.0        (1.2)          2.1     317.5   360.4
Profit for                 
the period             -           -           -           -      81.0    81.0
Other items
income for      
the period             -           -           -        (0.2)     (4.6)   (4.8)
income for      
the period             -           -          -        (0.2)      76.4    76.2
dividends              -           -           -           -    (35.0)  (35.0)
Issue of
share capital         0.3           -          -           -         -     0.3
Purchase of
own shares by              
ESOT                   -           -        (1.3)           -         -   (1.3)
Issue of own
shares by                  
ESOT                   -           -          1.0           -         -     1.0
Adjustment to
equity for
payments               -           -          -          -     (0.4)   (0.4)
Share option               
charge                 -           -           -           -       2.2     2.2
Tax on items
directly in                
equity                 -           -          -           -     (1.1)   (1.1)
Balance at 3
March 2012           31.3         11.0        (1.5)          1.9     359.6   402.3
Changes in
equity for
the 52 weeks
to 26
February 2011
Balance at 27
February 2010        30.8         11.0        (0.4)          2.7     274.9   319.0
Profit for                   
the period             -           -           -           -      71.7    71.7
Other items
income for                   
the period             -           -           -        (0.6)     (1.7)   (2.3)
income for          
the period             -           -         -        (0.6)      70.0    69.4
dividends              -           -           -           -    (31.5)  (31.5)
Issue of
share capital         0.2           -           -           -         -     0.2
Purchase of
own shares by              
ESOT                   -           -        (1.0)           -         -   (1.0)
Issue of own
shares by                  
ESOT                   -           -          0.2          -         -     0.2
Adjustment to
equity for
payments               -           -           -           -       0.3     0.3
Share option                 
charge                 -           -           -          -       2.1     2.1
Tax on items
directly in                  
equity                 -           -           -           -       1.7     1.7
Balance at 26
February 2011        31.0         11.0        (1.2)          2.1     317.5   360.4

Notes to the unaudited condensed consolidated financial statements

1. Basis of preparation

The group's financial statements for the 53  weeks ended 3 March 2012 will  be 
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the EU.

Whilst the financial information included in this preliminary announcement has
been computed  in  accordance with  IFRS  this announcement  does  not  itself 
contain sufficient information  to comply  with IFRS. The  company expects  to 
publish full financial statements that comply with IFRS by 31 May 2012.

The  accounting  policies  adopted  in   the  preparation  of  the   condensed 
consolidated financial statements are consistent  with those disclosed in  the 
annual report & accounts for the 52 weeks ended 26 February 2011.

2. Principal risks and uncertainties

There are a number of  risks and uncertainties which  could have an impact  on 
the group's long-term performance. These include consideration of the  general 
economic climate,  the  impact  it has  on  the  provision of  credit  to  our 
customers and their ability  to maintain payment  terms; the potential  threat 
from our competitors;  our relationship with  key suppliers; the  loss of  key 
personnel; potential disruption to our key information systems, warehousing or
call centre facilities arising from events beyond our control such as fire  or 
other issues which could  have a detrimental impact  on sales and profit;  and 
changes  to  the  regulatory  environment  in  which  the  business  operates, 
primarily regulated by the Financial Services Authority and the Office of Fair

The directors  routinely  monitor all  these  risks and  uncertainties  taking 
appropriate  actions  to   mitigate  where   necessary.  Business   continuity 
procedures are in place, together  with a dedicated team assessing  regulatory 
developments, ensuring  we  treat our  customers  fairly and  hosting  regular 
reviews with all of  our strategic partners. The  board are also committed  to 
continually invest in updating the group's business systems and infrastructure
to keep pace with new technology.

3. Going concern

In determining whether the group's accounts can be prepared on a going concern
basis, the directors considered the group's business activities together  with 
factors likely to  affect its  future development,  performance and  financial 
position including cash  flows, liquidity position,  borrowing facilities  and 
the principal risks and uncertainties relating to its business activities.

The group has considered  carefully its cash flows  and banking covenants  for 
the next  twelve months  from the  expected  date of  signing of  the  group's 
audited financial  statements.  These have  been  appraised in  light  of  the 
uncertainty in  the current  economic  climate. Conservative  assumptions  for 
working capital performance have been used to determine the level of financial
resources available  to the  company and  to assess  liquidity risk.  The  key 
trading risk identified by the directors  for these assumptions is the  impact 
that a  further  deterioration in  the  economic  climate might  have  on  the 
performance of the group's sales and debtor book.

The group's forecasts and  projections, after sensitivity  to take account  of 
all reasonably foreseeable changes in trading performance, show that the group
will have sufficient headroom within its current loan facilities of £370m. The
group's loan facilities have  been renewed during the  year and are  committed 
until 2016.

After  making  appropriate   enquiries,  the  directors   have  a   reasonable 
expectation that the company and the group have adequate resources to continue
in  operational  existence  for  the  foreseeable  future.  Accordingly,  they 
continue to adopt  the going concern  basis in the  preparation of the  annual 
report and accounts.

4. Business segments

                                             53 weeks to        52 weeks to
                                                03-Mar-12           26-Feb-11
                                                      £m                 £m
Analysis of revenue - Home shopping
Sale of goods                                      534.8               523.7
Rendering of services                              218.4               195.1
                                                    753.2               718.8
Analysis of result
Segment result & operating profit -
Home shopping                                       102.0               102.6
Investment income                                    4.3                4.1
Finance costs                                     (10.7)               (8.5)
Fair value adjustments to financial
instruments                            1.3               (3.7)
Profit before taxation                 96.9   94.5

The group has one business segment and one significant geographical segment
that operates in the United Kingdom and Ireland.

5. Derivative financial instruments

At the balance sheet date, details of outstanding forward foreign exchange
contracts that the group has committed to are as follows:

                                            53 weeks to         52 weeks to
                                               03-Mar-12            26-Feb-11
                                                     £m                  £m
Notional Amount - Sterling contract
value                                               43.6                 45.1
Fair value of liability recognised                (0.1)   (1.4)

Changes in the fair value of assets recognised, being non-hedging currency
derivatives, amounted to a credit of £1.3m (2011, charge of £3.7m) to income
in the period.

The fair value of foreign currency derivatives contracts is their quoted
market value at the balance sheet date. Market values are based on the
duration of the derivative instrument together with the quoted market data
including interest rates, foreign exchange rates and market volatility at the
balance sheet date.

6. Taxation

The effective rate of corporation tax for the year is 16.4% (2011, 24.1%).

7. Earnings per share

Earnings                                     53 weeks to        52 weeks to
                                                03-Mar-12           26-Feb-11
                                                      £m                 £m
Total net profit attributable to
equity holders of the parent for the
purpose of basic and diluted earnings
per share                               81.0    71.7
Fair value adjustment to financial
instruments (net of tax)               (1.0)   2.7
Total net profit attributable to
equity holders of the parent for the
purpose of basic and diluted
adjusted earnings per share             80.0    74.4

Number of shares                                53 weeks to   52 weeks to
                                                    03-Mar-12      26-Feb-11
                                                 No. ('000s)   No. ('000s)
Weighted average number of shares in issue for
the purpose
of basic earnings per share                          276,681        275,323
Effect of dilutive potential ordinary
Share options                                            367            466
Weighted average number of shares in issue for
the purpose
of diluted earnings per share                        277,048        275,789
Earnings per share
Basic                                                  29.28 p        26.04 p
Diluted                                                29.24 p        26.00 p
Adjusted earnings per share
Basic                                                  28.91 p        27.02 p
Diluted                                                28.88 p        26.98 p

8. Dividends

The final proposed dividend  of 7.74 pence per  share, subject to approval  by 
shareholders, will be paid on 27 July 2012 to shareholders on the register  at 
the close of business on 29 June 2012.

9. Non-statutory financial statements

The financial information set out in the announcement does not constitute  the 
company's statutory accounts for  the 53 weeks  ended 3 March  2012 or the  52 
weeks ended 26 February 2011. The financial information for the 52 weeks ended
26 February 2011 is  derived from the statutory  accounts for that year  which 
have been delivered to  the Registrar of Companies.  The auditors reported  on 
those accounts; their report  was unqualified, did not  draw attention to  any 
matters by way of emphasis without qualifying their report and did not contain
a statement  under  s498(2)  or (3)  Companies  Act  2006. The  audit  of  the 
statutory accounts for the 53  weeks ended 3 March  2012 is not yet  complete. 
These accounts will  be finalised on  the basis of  the financial  information 
presented by  the  directors in  this  preliminary announcement  and  will  be 
delivered to the Registrar of Companies following the company's annual general

This report was approved by the Board of Directors on 1 May 2012.

                     This information is provided by RNS
           The company news service from the London Stock Exchange


FR IMMPTMBAJBLT -0- May/01/2012 06:00 GMT
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