Interim Results

Brown (N.) Group PLC
19 October 2004

19 October 2004
                               N Brown Group plc

                          INTERIM RESULTS ANNOUNCEMENT
                         HALF YEAR ENDED 28 AUGUST 2004

N Brown Group plc, the Manchester based direct home shopping company, today
announces its interim results for the half year ended 28 August 2004.

Highlights:

   •Focus on core product ranges delivered good growth, with operating profit
    up 6.7% in core home shopping business
   •Positive action taken to address two underperforming businesses -
    disposal of Teleview anticipated and action taken to stabilise House of
    Stirling
   •Turnover £225.6m (H1 2003: £231.0m)
   •Profit before tax £21.0m (H1 2003: £25.1m)
   •Strong cash inflow of £7.8m
   •Interim dividend maintained at 1.74p per share (2003: 1.74p)
   •Express Shopping Channel successfully launched on digital television

Lord Alliance CBE, Chairman, commented:

'We are encouraged that the results show continuing growth in the core clothing
and footwear business, which contributes 75% of the Group's overall sales. It is
also pleasing to note that N Brown has yet again outperformed the wider home
shopping sector.

'The management team has worked hard during the first half and made good
progress towards delivering sustained performance and putting the core clothing
and footwear business on a sound platform for the future, whilst the issues in
the peripheral businesses are being addressed.'

Alan White, Chief Executive, added:

'Improvements to the fashionability of our clothing and footwear ranges have
driven the continuing recovery in the core business during the first half of the
year, with footwear and corsetry performing especially well against the
background of tough trading conditions.

'Our multi-channel approach to home shopping is developing with the recent
launch of the Express Shopping Channel on digital television and the imminent
promotion of the new VivaLaDiva.com website which will be offering the largest
on-line range of fashion footwear.'

For further information please contact:

N Brown Group plc
Alan White, Chief Executive                 On the day: 0207 554 1400
Dean Moore, Finance Director                Thereafter: 0161 238 2202
Website : www.nbrown.co.uk
----------------------------

Gavin Anderson & Company
Charlotte Stone / Richard Constant          Tel: [phone]


CHAIRMAN'S STATEMENT

Introduction

The group results comprise a better performance from the core home shopping
business offset by disappointing results from our other activities. Group
turnover is down 2.3% at £225.6m with operating profit down 12.0% at £24.8m. A
cash inflow of £7.8m compares with an outflow of £28.3m last year and the
dividend has been maintained at 1.74p per share.

Home Shopping

Core home shopping results, excluding Teleview and House of Stirling, which are
covered separately below, show a 0.7% increase in sales to £206.3m and a
positive 40bps movement in gross margin, and an overall increase in operating
profit by 6.7% from £26.0m to £27.9m. This improvement has been achieved as a
result of our strategy to focus on those product ranges where we have a
competitive advantage.

The 0.7% increase in sales was achieved despite a 4.2% reduction in home and
leisure sales, following the decision not to offer interest-free credit on low
margin, high value electrical and furniture lines. Sales of clothing and
footwear were up by 2.5%, with encouraging performances in lingerie, footwear
and larger sized ladies clothing. The success in creating a clothing range for
the younger, larger woman has resulted in a 23% increase in sales to Simply Be
customers.

During the first half we have continued to revise the format and frequency of
our catalogues to good effect. We have increased the number of major offers at
the expense of the smaller leaflets contained within our statement packs. This
has provided a significant increase in sales of 4% to established customers.

The promotion of our multiple websites has led to a further 68% increase in
on-line sales to £21m and we are now seeing an increasing proportion of new
customers registering on-line. We have started collecting new customers' e-mail
addresses enabling us to drive even more sales through this channel, which will
reduce operating costs.

Gross margins within the core home shopping have risen as the mix of product
moved towards clothing and footwear, and the rate of bad debts to debtors
reduced. A targeted cost reduction programme has delivered some good savings in
the first half, although parcel distribution costs continue to rise at above the
rate of inflation.

House of Stirling

House of Stirling, our weekly collected credit operation, has incurred a £4.2m
loss (LY £0.1m) due to a sales reduction of 36% to £9.2m, and a significant
increase in bad debts. These are the results of a deteriorating cash collection
performance and a consequent restriction on the credit available to customers.

A recovery plan is in place to improve performance within House of Stirling,
seeking to focus sales activity on lower ticket items with shorter credit terms,
improve cash collection, and a better balanced remuneration package for field
staff has already been introduced.

Teleview

The disposal of Teleview, which lost £0.2m during the period against a profit of
£0.6m last year, is at an advanced stage of negotiation.

Fulfilment and Financial Services

Zendor, our third party fulfilment business, made a small operating loss of
£0.1m compared to a £0.2m loss last year. The interactive services activity was
closed down as planned in July and the business re-focussed on fulfilment
contracts. There is a strong pipeline of prospects and we have secured the
contract to fulfil all Woolworth's on-line and catalogue orders, excluding
entertainment.

First Financial improved its profit from the second half of last year despite
the tighter underwriting criteria we are applying and the reduction in warranty
income from lower electrical sales.

Balance Sheet

We have been continuing to focus on ensuring that capital is only invested where
there is an adequate return. We have tightened the control over working capital
and the requirements for capital expenditure are now lower than in recent years.
The result is a cash inflow of £7.8m, against a cash outflow of £28.3m in the
prior year, reducing borrowings to £137.8m, and gearing down to 54%.

Prospects

Core home shopping sales in the first seven weeks of the current period are
level with last year and the positive trends from the first half are continuing.
The main Autumn catalogues are driving sales increases in clothing and footwear,
which are 2% ahead, whilst home and leisure sales are down by 5%. However, we
have recently launched a new home and gift book containing many new product
lines, from which the early signs are encouraging. We believe that this category
can be driven forward in a more profitable way during the second half.

Group sales are currently down 1.5% due to the continuing impact of House of
Stirling, although profitablility has been enhanced through a better mix of
activities.

The development of our home shopping business will rely increasingly on a
multi-channel approach and we have invested jointly with Northern and Shell to
create the Express Shopping Channel. Transmitted on satellite and cable
television, this channel sells a selection of our products supplemented by a
number of special purchases, and went live as planned in September. It will be
promoted strongly throughout the Autumn season to build up the customer base.

Additionally internet sales continue to flourish, and will be complemented
shortly by the launch of a new website, VivaLaDiva.com, providing the largest
on-line footwear range for the fashion conscious woman.

We are confident that by maintaining our focus on the core product ranges which
provide us with a competitive advantage, further developing new channels to
market, and reducing our operating costs we will continue to improve our
underlying business performance.


Lord Alliance CBE
19th October 2004

GROUP PROFIT AND LOSS ACCOUNT (Unaudited)

                                                26 weeks   26 weeks   52 weeks
                                                      to         to         to
                                                  28 Aug     30 Aug     28 Feb
                                                    2004       2003       2004
                                       Note           £m         £m         £m

Turnover                                   1       225.6      231.0      470.5
                                                 ---------  ---------   --------

Operating profit                           2        24.8       28.1       36.1
Profit on sale of tangible fixed
assets                                               0.1       (0.1)       1.0
                                                 ---------  ---------   --------

Profit on ordinary activities
before finance charges                              24.9       28.0       37.1

Net interest payable and similar
charges                                             (3.9)      (2.9)      (6.1)
                                                 ---------  ---------   --------

Profit on ordinary activities
before taxation                                     21.0       25.1       31.0

Taxation on profit on ordinary
activities                                 4        (6.0)      (7.2)     (12.6)
                                                 ---------  ---------   --------

Profit on ordinary activities
after taxation                                      15.0       17.9       18.4

Equity minority interests                              -          -       (0.5)
                                                 ---------  ---------   --------

Profit for the financial period                     15.0       17.9       17.9

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

Retained profit                                      9.9       12.8        0.8
                                                 ---------  ---------   --------

Earnings per share                         6        5.12p      6.11p      6.11p
                                                 ---------  ---------   --------

Diluted earnings per share                 6        5.11p      6.08p      6.08p
                                                 ---------  ---------   --------

Dividends per share                        5        1.74p      1.74p      5.84p
                                                 ---------  ---------   --------

GROUP BALANCE SHEET (Unaudited)
                                                At         At          At
                                            28 Aug     30 Aug      28 Feb
                                              2004       2003        2004
                                                £m         £m          £m
                                                     (restated)  (restated)

Fixed assets
Intangible assets                                -        9.7           -
Tangible assets                               80.9       88.1        83.0
                                           ---------   --------   ---------
                                              80.9       97.8        83.0
                                           ---------   --------   ---------
Current assets
Stocks                                        43.9       42.4        46.4
Debtors                                      353.9      343.7       354.1
Cash at bank and in hand                      33.4       21.9        26.8
                                           ---------   --------   ---------
                                             431.2      408.0       427.3
                                           ---------   --------   ---------
Creditors
Amounts falling due within one year          (82.0)     (83.8)      (90.4)
                                           ---------   --------   ---------

Net current assets                           349.2      324.2       336.9
                                           ---------   --------   ---------

Total assets less current liabilities        430.1      422.0       419.9

Creditors
Amounts falling due after more than one     (170.6)    (161.1)     (170.6)
year

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

Net assets                                   254.5      255.5       244.3
                                           ---------   --------   ---------

Capital and reserves
Called-up share capital                       29.5       29.5        29.5
Share premium account                          9.1        8.7         9.1
Revaluation reserve                              -        1.3           -
Own shares                                    (1.7)      (2.7)       (2.3)
Profit and loss account                      217.6      219.3       208.0
                                           ---------   --------   ---------

Equity shareholders' funds                   254.5      256.1       244.3

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

Capital employed                             254.5      255.5       244.3
                                           ---------   --------   ---------

Gearing                                         54%        56%         60%
                                           ---------   --------   ---------


GROUP CASH FLOW STATEMENT (Unaudited)

                                              26 weeks   26 weeks    52 weeks
                                                  to         to          to
                                              28 Aug     30 Aug      28 Feb
                                                2004       2003        2004
                                                  £m         £m          £m
Reconcilition of operating profit to
operating cash flows
Operating profit                                24.8       28.1        36.1
Decrease/(increase) in stocks                    2.5       (0.8)       (4.7)
Increase in debtors                             (3.4)     (16.9)      (23.2)
Increase/(decrease) in creditors                 3.9       (8.6)       (9.6)
Depreciation                                     5.7        6.7        12.6
Amortisation of goodwill and other
intangible fixed assets                            -        0.3         0.7
Impairment of goodwill and tangible
fixed assets                                       -          -        17.5
                                             ---------   --------   ---------

Net cash inflow from operating
activities                                      33.5        8.8        29.4

Returns on investments and servicing
of finance                                      (4.6)      (2.8)       (6.4)

Taxation paid                                   (9.2)      (6.2)      (12.8)

Capital expenditure and financial
investment                                       0.1      (16.0)      (23.3)

Acquisitions and disposals                         -       (0.1)       (0.3)

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

Cash inflow/(outflow) before
financing                                        7.8      (28.3)      (30.5)

Financing                                          -       26.5        33.4
                                             ---------   --------   ---------
Increase/(decrease) in cash in the
financial period                                 7.8       (1.8)        2.9
                                             ---------   --------   ---------

Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash in the
financial period                                 7.8       (1.8)        2.9
Cash inflow from increase in loans                 -      (27.0)      (34.0)
Repayment of loans                                 -        0.5         0.5
Repayment of capital element of
finance leases                                     -          -         0.5
                                             ---------   --------   ---------
Changes in net debt resulting from
cash flows                                       7.8      (28.3)      (30.1)
                                             ---------   --------   ---------
Movement in net debt in the period               7.8      (28.3)      (30.1)
Net debt at beginning of financial
period                                        (145.6)    (115.5)     (115.5)
                                             ---------   --------   ---------
Net debt at end of financial period           (137.8)    (143.8)     (145.6)
                                             ---------   --------   ---------


STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES (Unaudited)
                                          26 weeks   26 weeks   52 weeks
                                              to         to         to
                                          28 Aug     30 Aug     28 Feb
                                            2004       2003       2004
                                              £m         £m         £m

Profit for the financial period             15.0       17.9       17.9

Exchange adjustments offset in
reserves                                       -          -       (0.1)
                                         ---------  ---------   --------
Total recognised gains relating to
the financial period                        15.0       17.9       17.8
                                         ---------  ---------   --------

RECONCILIATION OF MOVEMENTS IN GROUP
SHAREHOLDERS' FUNDS (Unaudited)
                                           26 weeks    26 weeks   52 weeks
                                               to          to         to
                                           28 Aug      30 Aug     28 Feb
                                             2004        2003       2004
                                               £m          £m         £m
                                                     (restated) (restated)

Profit for the financial period              15.0        17.9       17.9

Dividends                                    (5.1)       (5.1)     (17.1)
                                          ---------   ---------   --------
                                              9.9        12.8        0.8

Other recognised gains and losses
(net) relating to the period                    -           -       (0.1)
Share option charge                           0.3         0.3        0.2
Issue of ordinary share capital                 -           -        0.4
                                          ---------   ---------   --------

Net addition to shareholders' funds          10.2        13.1        1.3

Opening equity shareholders' funds
(as restated)                               244.3       243.0      243.0
                                          ---------   ---------   --------
Closing equity shareholders' funds          254.5       256.1      244.3
                                          ---------   ---------   --------


NOTES TO THE ACCOUNTS (Unaudited)

                                          26 weeks    26 weeks    52 weeks
                                              to          to          to
                                            28 Aug      30 Aug      28 Feb
                                            2004        2003        2004
                                              £m          £m          £m

1. Analysis of turnover
Home shopping                              206.3       204.9       412.6
Door to door selling                         9.2        14.3        33.1
TV Rental                                    3.2         3.7         7.2
Financial services                           3.8         4.4         8.7
Fulfilment                                   3.1         3.7         8.9
                                         ---------   ---------   ---------

                                           225.6       231.0       470.5
                                         ---------   ---------   ---------

2. Analysis of operating profit
Home shopping                               27.9        26.0        52.2
Door to door selling                        (4.2)       (0.1)       (2.0)
TV Rental                                   (0.2)        0.6        (8.4)
Financial services                           1.4         1.8         2.4
Fulfilment                                  (0.1)       (0.2)       (8.1)
                                         ---------   ---------   ---------

                                            24.8        28.1        36.1
                                         ---------   ---------   ---------

3. The report was approved by the board of directors on 19 October 2004. The
accounts for the 26 weeks to 30 August 2003 and the 52 weeks to 28 February 2004
have been restated following the implementation of UITF Abstract 38 - Accounting
for ESOP Trusts. The effect of this change is that shares held within Employee
Share Option Schemes are no longer classified in the balance sheet as a fixed
asset investment but as a deduction from shareholders' funds. This change has no
impact on the profit and loss account. All other accounting policies adopted are
consistent with those set out in the Annual Report and Accounts for the 52 weeks
ended 28 February 2004.

The figures for the 52 weeks ended 28 February 2004 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.

4. The taxation charge for the 26 weeks ended 28 August 2004 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 7 January
2005 to shareholders on the register at the close of business on 10 December
2004.

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 293,746,000 (2003, 292,778,000). For diluted earnings per share, the
weighted average number of shares of 294,502,000 (2003, 294,264,000) has been
calculated after adjusting for the potential dilution of outstanding share
options.

7. It is expected that the interim report for the 26 weeks ended 28 August 2004
will be posted to shareholders on 25 October 2004.



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