Date: Thursday 10 Oct 2013
LONDON (ShareCast) - Simon Patterson, Non-Executive Director of N Brown Group, has taken advantage of the recent decline in its share price to acquire 10,000 shares in the online and catalogue retailer.
Patterson bought the shares, his only holding in the company, at 463.54p for a total spend of £46,354.
The previous day the group revealed that first-half profit before tax came in at £45m, some 3% below broker Citigroup's forecast of £46.3m, due to a worse-than-expected margin performance, which offset better like-for-like sales growth.
Adjusted earnings per share were broadly flat, up just 0.6% at 12.55p, although the group did post an 8% rise in revenue and 5.9% increase in operating profits in the first half.
Citi retained its 'neutral' rating and 488p target price, saying that strong top line growth at N Brown is being predominantly driven by Home & Leisure sales with little sign of improvement in the core Womenswear category.
"The interim results were the first opportunity for new Chief Executive Angela Spindler to give some thoughts on the business and strategy. We came away still thinking the investment debate hinges around further clarity on a number of fronts," Citi said.
On the one hand, the bank said Spindler brings "fresh thinking" about consolidating sub-brands, focusing marketing around key brands, concentrating international efforts on the US and improving the display of products.
"However, the overview was not enough for us to form a fully informed view on how N Brown’s strategy is likely to develop. We do think that without deviation from the current path the chance of earnings upgrades is slight given the lack of operating leverage being seen in the business despite accelerating top line trends," the broker said.
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