N Brown Group Plc (BWNG), a U.K. internet and catalogue home shopping company, said full-year profit rose 15 percent as it sold more items online. The stock rose the most in almost a month.
Net income increased to 71.7 million pounds ($117.4 million) from 62.5 million pounds a year earlier, the company said in a statement today. Revenue climbed 4.2 percent to 718.8 million pounds.
Online sales accounted for 45 percent of revenue at 324 million pounds. Last year, online sales overtook telephone orders for the first time as the company invested in improving its Internet sales system.
“The online world is driving us forward,” Chief Executive Officer Alan White said in a phone interview today. “We are investing in our online systems and online will be the main driver of U.K. sales.”
N Brown is “on track” to meet its own forecasts this fiscal year, White added. Comparable sales for at least a year in the 10 weeks ended May 7 rose 1.5 percent.
“Current sales growth of 4.8 percent represents a solid start to the new financial year,” John Stevenson, an analyst with Peel Hunt LLP said in a note to investors today. Stevenson recommends buying the stock.
Overseas sales will triple this fiscal year driven by growth in the U.S. and Germany, White said. Overseas sales reached 4.2 million pounds last year. N Brown started selling in the U.S. last year and in Germany in 2009.
“We put our toes in the water and what we see so far has been encouraging,” White said.
White said N Brown is looking to shift some clothing production back to the U.K. from Asia because of higher labor and transportation costs. “There is still a huge gap in labor costs but it’s narrowing so it will happen, but it will be a drift,” White said.
N Brown purchases about 80 percent of its clothing from Asia and around 30 percent of that is manufactured in China, White said.
The stock rose 4.3 percent to close at 298 pence at 4:30 p.m. in London, giving the company a market value of 835.7 million pounds.
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