Interim Results

Brown (N.) Group PLC
16 October 2003


                                N Brown Group plc

                          INTERIM RESULTS ANNOUNCEMENT
                     FOR THE SIX MONTHS TO 30 AUGUST 2003

N Brown Group plc, the Manchester based direct home shopping, financial services
and fulfilment company, today announces its interim results for the six months
to 30 August 2003.

Highlights:

   •Turnover up 2.2% to £231.0m (2002: £226.0m)
   •Profit before tax £25.1m (2002: £27.1m)
   •Interim dividend per share maintained at 1.74p (2002: 1.74p)
   •Earnings per share 6.11p (2002: 6.62p)
   •New customer numbers up 4% due to improved marketing campaigns
   •Financial services division operating profit up 65% to £1.8m
   •Group and home shopping sales up 2% for the first 6 weeks of the second
    half of the year

Sir David Alliance CBE, Chairman, said:

'We are pleased with the evidence of real signs of recovery over the first half,
which demonstrate that the temporary halt to growth at the end of last year is
being addressed and the measures taken to drive performance improvement are
starting to bear fruit.

'We are confident that the significant efforts of the management team over the
past year mean the business is well positioned to continue its recovery over the
course of the second half and beyond.'

Alan White, Chief Executive, added:

'The first half of this year has continued to be challenging for the whole home
shopping market.  We are improving our sourcing and expanding the product 
offering with more fashionable ranges. As customer attitudes and needs continue
to evolve, the flexibility of N Brown's model and ability to exploit all 
channels to market, combined with focused marketing efforts, will drive the 
return to growth in the core home shopping business.'

                                     -ENDS-

N Brown Group plc
Alan White, Chief Executive                 On the day: 020 7554 1400
Tim Kowalski, Finance Director              Thereafter: 0161 236 8256

Gavin Anderson & Company
Neil Bennett/Charlotte Stone                Tel: [phone]

Websites:                                   www.nbrown.co.uk
                                            --------------------

CHAIRMAN'S STATEMENT


The group results for the first six months to 30 August 2003 show turnover up by
2.2% to £231.0m, but operating profit is down by 5.7% to £28.0m. Whilst there
are real signs of recovery the situation identified in the business in the
second half of last year continued into the first half of this financial year.
Profit before tax and goodwill amortisation of £25.3m and earnings per share of
6.1p are both down by 7.7%. The interim dividend has been maintained at 1.74
pence per share in anticipation of a better trading performance in the second
half.

Home Shopping

Home shopping has been the most challenged sub-sector of retailing recently and
our turnover growth of 2.0% to £223m represents an outperformance against our
peer group.

Operating profits have fallen by 8.8% to £26.4m, recovering from the levels seen
in the second half of last year when they were 20% down. The main reason for the
dip in profits is a 0.9% reduction in the gross margin rate to 54.9%, which is
the result of the changing mix of business. One element of this has been a trend
in recent seasons that the proportion of non-catalogue activity has been
growing, with customers' orders derived from a number of pro-active contacts in
addition to the main catalogue mailings. These include the monthly mailings
programme, where sales were up 4%, and by up-selling through order building and
outbound telephony, where sales rose by 15%. In addition, our e-commerce
business continues to advance with revenues doubling in the period to over £14m.

This mix of activities demonstrates the flexibility of our business to adapt to
the changing attitudes and needs of our customers, but the gross margin is lower
in aggregate than we achieve from our main catalogues where sales are down by
4%. A great deal of work and effort has been put into rebuilding the competitive
attractions of our main catalogues, including changes to the product, pagination
and presentation, the impact of which should be seen in future seasons.

The catalogues targeted at customers in the 30 to 45 age range continue to
exhibit good growth, with Simply Be increasing sales by 30% to £12m, of which
25% is from orders placed on-line. Sales from our core mid-life customers in the
45 to 65 age range were level with last year. Recruitment activity improved with
a 4% increase in new customers which will help to drive sales in future periods.
Despite this extra recruitment activity our marketing costs rose by only 2% as a
result of improved database segmentation techniques.

Sales from ladieswear were just ahead of last year in aggregate with the hot
summer boosting sales from separates, leisurewear and sportswear but adversely
impacting sales of coats, dresses and knitwear. Footwear, one of our core
product areas, bounced back with an 8% increase but menswear declined by a
further 6%. Home and leisure product sales rose by 5%, with electrical products
increasing in value by 18%.

House of Stirling, our door-to-door selling operation, continued to advance with
sales up 35% to £14m as it increased both its geographic coverage and sales
penetration. The partnership with Securicor Omega has started well and has kept
our increase in distribution costs down to 7.7% despite rate increases for home
delivery by our third party carriers of around 20%.

Financial Services

First Financial, our dedicated financial services business, has had a strong
first half with lending volumes up and the rate of bad debts gradually reducing.
This has resulted in turnover of £4.4m, up 34%, and operating profits ahead by
65% at £1.8m. Brokered services, which is the long established part of the
business, continue to provide the bulk of the profits but we are building a
direct personal loan book where advances increased by 29% and which contributed
operating profits of £0.6m. Total advances outstanding now exceed £22m and we
continue to explore other financial products, such as credit cards and secured
lending, to extend our portfolio.

Fulfilment

Zendor, which provides home shopping solutions for third party clients, saw its
turnover decline by 10% to £3.7m but made a small operating profit compared with
a loss of £0.1m last year. The focus of the division has been on profitable
contracts, from existing and new clients, and we are in discussion with a number
of potential strategic partners to capitalise on the many opportunities
available in the fast growing e-commerce and home delivery channels.

Balance Sheet

Net assets have increased by 9% to £258m and gearing is at 56%, compared with
42% last year. Total capital expenditure in the half was £17m. In addition to
£3m expenditure on operating systems and a £1m investment in television rental
assets for Teleview, £13m has been incurred on the purchase of a freehold
refurbished office building in Manchester to which we will move in the first
quarter of 2004, and which will deliver a much improved, but still low-cost,
working environment. The total net capital expenditure for this move is
anticipated to be £18m.

Working capital has increased with the earlier intake of Autumn merchandise
boosting stock levels by 27%, which are delivering higher first time service
levels for our customers. Debtors are up by 14% at £344m due to the high rates
of growth in First Financial and House of Stirling's debtors on top of the
growth in home shopping customer balances.

Prospects

Our strategy is to deliver growth from our target market by bringing our product
ranges ever more up-to-date and refreshing them with in-season purchasing,
increasingly from European markets.

The Autumn Winter 2003 catalogues have restored the wide range of choice our
customers expect, especially in those areas where we have unique selling
propositions, such as larger sized clothing, lingerie and footwear. The expanded
Spring Summer 2004 catalogues will see significant changes, both by introducing
more fashionable styles into the product range and by adopting a more
contemporary style of presentation. The arrival in September of two new home
shopping directors in marketing and logistics, John Hinchcliffe and Keith Risk,
both with significant home shopping experience, will help to drive future
growth. We have also strengthened the customer service management team to
improve our service which is increasingly important for customer retention.

Sales in the first six weeks of the second half are up by 2% for home shopping
and for the group. We hope to see further recovery as the season progresses, and
we expect a positive response from our customers to the developments in our
Spring Summer 2004 catalogues.

Sir David Alliance, CBE
16 October 2003


GROUP PROFIT AND LOSS ACCOUNT (Unaudited)

                                  26 weeks to     26 weeks to     52 weeks to
                                  30 Aug 2003     31 Aug 2002     1 March 2003
                           Note            £m              £m               £m

Turnover                      1         231.0           226.0            457.3
                                    =========      ==========       ==========

Operating profit before
goodwill amortisation         2          28.3            30.1             60.2
Goodwill amortisation                    (0.3)           (0.4)            (0.7)
                                    ---------      ----------       ----------

Operating profit              3          28.0            29.7             59.5

Net interest payable and
similar charges                          (2.9)           (2.6)            (5.4)
                                    ---------      ----------       ----------

Profit on ordinary
activities before taxation               25.1            27.1             54.1

Taxation on profit on
ordinary activities           4          (7.2)           (7.7)           (15.4)
                                    ---------      ----------       ----------

Profit on ordinary
activities after taxation                17.9            19.4             38.7

Equity minority interests                   -               -             (0.2)
                                    ---------      ----------       ----------

Profit for the financial
period                                   17.9            19.4             38.5

Dividends                     5          (5.1)           (5.1)           (17.1)
                                    ---------      ----------       ----------

Retained profit                          12.8            14.3             21.4
                                    =========      ==========       ==========

Earnings per share            6          6.11p           6.62p           13.16p
                                    =========      ==========       ==========

Diluted earnings per share    6          6.08p           6.58p           13.10p
                                    =========      ==========       ==========

Dividends per share           5          1.74p           1.74p            5.84p
                                    =========      ==========       ==========


GROUP BALANCE SHEET (Unaudited)

                                        At                At               At
                               30 Aug 2003       31 Aug 2002       1 Mar 2003
                                        £m                £m               £m
Fixed assets
Intangible assets                      9.7              10.0             10.0
Tangible assets                       88.1              76.9             77.6
Investments                            2.7               2.7              3.9
                                 ---------         ---------        ---------
                                     100.5              89.6             91.5
                                 ---------         ---------        ---------

Current assets
Stocks                                42.4              33.5             41.7
Debtors                              343.7             300.7            326.8
Cash at bank and in hand              21.9              24.1             24.0
                                 ---------         ---------        ---------
                                     408.0             358.3            392.5
                                 ---------         ---------        ---------

Creditors
Amounts falling due within one
year                                 (83.8)            (92.0)           (96.1)
                                 ---------         ---------        ---------

Net current assets                   324.2             266.3            296.4
                                 ---------         ---------        ---------

Total assets less current
liabilities                          424.7             355.9            387.9

Creditors
Amounts falling due after more
than one year                       (161.1)           (114.6)          (137.1)

Provisions for liabilities and
charges                               (5.4)             (5.0)            (5.4)
                                 ---------         ---------        ---------

Net assets                           258.2             236.3            245.4
                                 =========         =========        =========

Capital and reserves
Called-up share capital               29.5              29.4             29.5
Share premium account                  8.7               7.4              8.7
Revaluation reserve                    1.3               1.7              1.7
Profit and loss account              219.3             198.8            206.1
                                 ---------         ---------        ---------

Equity shareholders' funds           258.8             237.3            246.0

Equity minority interests             (0.6)             (1.0)            (0.6)
                                 ---------         ---------        ---------

Capital employed                     258.2             236.3            245.4
                                 =========         =========        =========

Gearing                                 56%               42%              47%



GROUP CASH FLOW STATEMENT (Unaudited)

                                  26 weeks to     26 weeks to      52 weeks to
                                  30 Aug 2003     31 Aug 2002     1 March 2003
                                           £m              £m               £m
Operating activities
Operating profit                         28.0            29.7             59.5
(Increase) decrease in stocks            (0.8)            5.4             (2.7)
Increase in debtors                     (16.9)          (18.6)           (44.4)
(Decrease) increase in
creditors                                (8.6)            0.1              4.1
Depreciation (net of profit
(loss) on disposals)                      6.8             6.7             13.6
Amortisation of goodwill and
other intangible fixed assets             0.3             0.4              0.7
                                    ---------       ---------        ---------

Net cash inflow from
operating activities                      8.8            23.7             30.8

Returns on investments and
servicing of finance                     (2.8)           (2.5)            (5.5)

Taxation paid                            (6.2)           (7.9)           (16.6)

Capital expenditure and
financial investment                    (16.0)           (7.3)           (14.5)

Acquisitions and disposals               (0.1)           (0.1)            (0.1)

Equity dividends paid                   (12.0)          (12.0)           (17.1)
                                    ---------       ---------        ---------

Cash outflow before financing           (28.3)           (6.1)           (23.0)

Financing                                26.5            21.3             37.6
                                    ---------       ---------        ---------
(Decrease) increase in cash
in the financial period                  (1.8)           15.2             14.6
                                    =========       =========        =========

Reconciliation of net cash flow
to movement in net debt

(Decrease) increase in cash
in the financial period                  (1.8)           15.2             14.6
Cash inflow from increase in
loans                                   (27.0)         (117.0)          (136.0)
Repayment of bank loans and
loan notes                                0.5            96.0             98.2
Repayment of capital element
of finance leases                           -               -              0.5
                                    ---------       ---------        ---------
Changes in net debt resulting
from cash flows                         (28.3)           (5.8)           (22.7)
New unsecured loan notes                    -            (0.2)            (0.2)
                                    ---------       ---------        ---------
Movement in net debt in the
period                                  (28.3)           (6.0)           (22.9)

Net debt at beginning of
financial period                       (115.5)          (92.6)           (92.6)
                                    ---------       ---------        ---------
Net debt at end of financial
period                                 (143.8)          (98.6)          (115.5)
                                    =========       =========        =========


STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES (Unaudited)

                                  26 weeks to     26 weeks to      52 weeks to
                                  30 Aug 2003     31 Aug 2002     1 March 2003
                                           £m              £m               £m

Profit for the financial
period                                   17.9            19.4             38.5

Unrealised gain on trade
investment                                  -             0.1              0.1
Exchange adjustments offset
in reserves                                 -               -              0.2
                                   ----------       ---------       ----------
Total recognised gains
relating to the financial
period                                   17.9            19.5             38.8
                                   ==========       =========       ==========


RECONCILIATION OF MOVEMENTS IN GROUP
SHAREHOLDERS' FUNDS (Unaudited)

                                  26 weeks to     26 weeks to      52 weeks to
                                  30 Aug 2003     31 Aug 2002     1 March 2003
                                           £m              £m               £m

Profit for the financial
period                                   17.9            19.4             38.5

Dividends                                (5.1)           (5.1)           (17.1)
                                   ----------       ---------       ----------
                                         12.8            14.3             21.4

Other recognised gains and
losses (net) relating to the
period                                      -             0.1              0.3
Transfer in respect of
employee share ownership
trusts                                      -             0.7              0.4
Issue of ordinary share
capital                                     -             0.7              2.4
                                   ----------       ---------       ----------

Net addition to shareholders'
funds                                    12.8            15.8             24.5

Opening equity shareholders'
funds                                   246.0           221.5            221.5
                                   ----------       ---------       ----------
Closing equity shareholders'
funds                                   258.8           237.3            246.0
                                   ==========       =========       ==========



NOTES TO THE ACCOUNTS (Unaudited)

                                       26 weeks to     26 weeks to     52 weeks to
                                       30 Aug 2003     31 Aug 2002      1 Mar 2003
                                                £m              £m              £m

1.  Analysis of turnover
    Home shopping                            222.9           218.6           439.7
    Financial services                         4.4             3.3             8.0
    Fulfilment                                 3.7             4.1             9.6
                                         ---------      ----------       ---------
                                             231.0           226.0           457.3
                                         ---------      ----------       ---------

2.  Analysis of operating profit
    before goodwill amortisation
    Home shopping                             26.5            29.1            57.2
    Financial services                         1.8             1.1             2.7
    Fulfilment                                   -            (0.1)            0.3
                                         ---------      ----------       ---------
                                              28.3            30.1            60.2
                                         ---------      ----------       ---------

3.  Analysis of operating profit
    Home shopping                             26.4            28.9            56.9
    Financial services                         1.8             1.1             2.7
    Fulfilment                                (0.2)           (0.3)           (0.1)
                                         ---------      ----------       ---------
                                              28.0            29.7            59.5
                                         ---------      ----------       ---------

4.  The taxation charge for the 26 weeks ended 30 August 2003 is based on the
    estimated effective tax rate for the full year.

5.  The interim dividend of 1.74p per ordinary share will be paid on 6 January 
    2004 to shareholders on the register at the close of business on 28 November
    2003.

6.  The calculation of earnings per share is based on the profit for the 
    financial period and the weighted average number of shares in issue during 
    the period of 292,778,000 (2002, 292,265,000). For diluted earnings per 
    share, the weighted average number of shares of 294,264,000 (2002, 
    294,039,000) has been calculated after adjusting for the potential dilution 
    of outstanding share options.

7.  The interim accounts were approved by the board of directors on 16 October 
    2003 and have been prepared in accordance with the accounting policies set 
    out in the Annual Report and Accounts for the 52 weeks ended 1 March 2003. 
    The figures for the 52 weeks ended 1 March 2003 have been extracted from the
    statutory accounts which have been filed with the Registrar of Companies. 
    The auditors' report on those accounts was unqualified and did not contain 
    any statement under section 237 of the Companies Act 1985.

8.  It is expected that the interim report for the 26 weeks ended 30 August 2003
    will be posted to shareholders on 17 October 2003.




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