N Brown (BWNG) jumped nearly a third after the online fashion retailer announced its trading levels improved after a sharp collapse in March. N Brown’s home and gift sales have grown 74% in the past six weeks, after being buoyed by the launch of its new brand Home Essentials in April. Overall product sales for the period were down 25%, as N Brown’s clothing sales fell 48% as consumers continued to flee its online stores during the coronavirus pandemic.
N Brown also provided an update on the health of its financial services business. The retailer allows customers to buy on credit and has a Â£ 500million securitization facility on customer balances it can draw on. In April, N Brown elected to grant clients the option to defer payments for three months, in accordance with guidelines from the Financial Conduct Authority. N Brown therefore expects cash collection to decline in the coming months, and the retailer has obtained an amendment to its securitization to take into account the volatility of its collection rates. N Brown also has a revolving credit facility of Â£ 125million and has drawn down a total of Â£ 512million from these two funding sources.
Peel Hunt analysts forecast FY20 adjusted pre-tax and earnings per share of Â£ 70.8million and 19.5p respectively, falling to Â£ 35.5million and 9.8p in 2021.