Resilient Brown improves by 23%

N BROWN, the mail order group based in Manchester, demonstrated the resilience of its niche markets by announcing a 23 per cent rise in pre-tax profits to pounds 7.44m for the six months to 29 August, writes John Murray.

Jim Martin, chief executive, said Brown's customers tended to be in the older age bracket and were less immediately affected by the recession.

He added that autumn sales were encouraging, although there was no sign of an upturn in consumer confidence.

Group turnover rose pounds 10m to pounds 79.6m and earnings per share increased 14 per cent to 6.84p. The interim dividend rises 11 per cent to 1.95p.

The City was impressed by the figures, marking the shares up 7p to 288p, but the jump in operating profit was only 2.4 per cent: most of the higher bottom-line figure came from reduced interest charges, a smaller payment to an employee trust and the absence of exceptional costs taken last year. The smaller interest charge resulted from the effects of an open share offer in May that raised pounds 16.5m. Gearing fell to 49 per cent.

Brown's established catalogues, aimed mainly at mature women in the C2DE socio-economic bracket, continued to show sales growth, but Mr Martin said he was especially pleased with the progress of the company's expansion into markets for younger women and the disabled.

Odhams, the mail order videos and compact discs business, showed a small profit of pounds 110,000 on turnover of pounds 3.8m, against the losses it sustained before it was bought by Brown from the receiver late last year.

The property and financial services division broke even at an operating level after posting operating profits of pounds 400,000 last time.

Emma Burnett, an analyst at Hoare Govett, lifted her profit forecast for the year to pounds 18.5m.