The owner of Simply Be and Jacamo has told investors that it expects the hangover of high inflation and low consumer confidence to continue to impact the business next year, as the retailer posts a 82.6 per cent decline in profit before tax.
N Brown, which trades solely online posted a 5.3 per cent decline in revenues for the year down to £677.5m compared to £715.7m in the same period last year, as a tough trading environment impacted its cost base.
During the year, the size inclusive retailer also handed £49.5m to Allianz insurance to settle a long term dispute over its insurance products – which led to a 82.6 per cent loss in adjusted profit before tax down from £43.1m last year to £7.5m
The settlement was made without admission of liability via N Brown’s owner JD Williams and related to “significant amounts of redress” paid to customers by JDW and the insurer in respect of certain historic insurance products, such as payment protection insurance.
The retailer which also offers flexible payment offers to its customers, said its financial services arm was 2.4 per cent to £244.1m due to lower retail sales and a “net of higher customer credit penetration”.
Looking ahead, the group said it wants to improve its bottom line moving further into clothing and has launched a new online mobile app for Simply Be.
However, it warned that it expects further increases in adjusted operating costs to group revenue ratio in FY24, due to inflationary pressures particularly in administration and payroll costs.
Steve Johnson, chief executive said: “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.
“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.”
He added: “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.”