Interim Results

Brown (N.) Group PLC
09 October 2007




                               N Brown Group plc


                          INTERIM RESULTS ANNOUNCEMENT

                        SIX MONTHS ENDED 25 AUGUST 2007


N Brown Group plc, the internet and catalogue home shopping company, today
announces its interim results for the 26 weeks to 25 August 2007.


Highlights:

   • Group revenue up to £290.6m                    +13.6%
   • Group operating profit from continuing         +17.7%
     operations up to £41.2m
   • Group profit before tax up to £34.3m           +17.5%
   • Home Shopping sales up to £286.8m              +14.2%:
   • Like-for-like sales up                         +10.6%
   • E-commerce sales up to £73m                    +40.0%
   • Earnings per share from continuing             +28.9%
     operations up to 9.14p
   • Interim dividend up to 2.65p                   +21.0%
   • Current trading for the six weeks ended        +11.1%
     6 October up


Alan White, Chief Executive, said:

'We are pleased to announce a strong and sustained performance for the half year
across all our customer and product groups. We have expanded our existing
catalogues and mid-season mailings and launched four new catalogues this year
which have seen very encouraging results thus far. There are huge opportunities
to grow our internet sales as more and more customers shop online. Sales for the
first six weeks give us confidence that we will deliver a good performance in
the second half.'

Lord Alliance of Manchester, CBE, Chairman, added:

'In recent years we have been focusing on improving our customer service,
product ranges, and the quality of the catalogues. We have also continued to
develop our channels to market, especially the internet, which is now at the
heart of our business. We have an experienced and devoted team and, with the
encouraging start to the second half, I have every confidence that we will
continue to perform strongly.'



                                     -Ends-


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
Fergus Wylie / Clotilde Gros               Tel: [phone]


CHAIRMAN'S STATEMENT

Group

Group revenue from continuing operations for the 26 weeks to 25 August 2007 is
up by 13.6% to £290.6m and operating profit is up by 17.7% to £41.2m. Profit
before tax is up by 17.5% to £34.3m and, incorporating the return of value to
shareholders and associated consolidation of share capital in February 2007,
earnings per share from continuing operations are up by 28.9% at 9.14p. The
directors are proposing an interim dividend of 2.65p, up 21.0% and covered 3.5
times.

Net debt at 25 August 2007 stood at £202.3m (2006, £105.3m) following the £80m
return of value to shareholders in March 2007 and a £15m special contribution to
the pension fund, which now has a deficit of only £7.9m (2006, £32.2m). Net
interest payable on borrowings was £7.1m, covered 5.8 times. Gearing was 93%
(2006, 41%) on net assets of £217.8m (2006, £255.3m).

Home Shopping

Home shopping turnover rose by 14.2% to £286.8m, or by 10.6% on a like-for-like
basisand operating profit is up by 16.8% to £41.0m. One of the strengths of our 
business model is the ability to have a wide range of merchandise on offer at 
all times to meet the customer's needs whatever the weather. The strange weather 
patterns in the first half did influence sales trends, with strong spring sales 
followed by a weaker summer period and then a good start for our autumn product 
ranges. It is therefore encouraging to report that once again we saw good 
progress in all our major customer and product groups, complemented by new 
catalogue launches and further improvements in customer service and our 
operating efficiency.

Customers

Turnover from our core midlife brands, targeted at customers aged 45-65,
accounted for 68% of total home shopping sales, increasing by 14% to £196m.
Within this group there were strong performances by JD Williams, Shoe Tailor,
Fifty Plus, Oxendales in Ireland and Premier Man. In addition Gray & Osbourn,
which was acquired on 30 June 2006, delivered sales of £12m compared with £2m in
the two months post-acquisition last year, representing an underlying
like-for-like sales growth of 13%.

Our younger titles, targeting customers aged 30-45, increased sales by 18% to
£78m with strong performances from Fashion World and, especially, Simply Be
where sales were up by a further 33%. The catalogues targeted at customers over
65 years of age had sales of £13m, level with last year.

The total number of active established customers rose by 3% and there was a
further 6% increase in the average spend per customer. These statistics
demonstrate that we are winning an increasing share of our customers' total
expenditure through improvements to our product ranges, catalogue and website
presentation, and our service standards. Sales from customers recruited during
the first half rose by 9% as we continued to target our campaigns on our unique
selling propositions which produce higher quality customers with greater
lifetime values.

Product Ranges

Turnover growth was evident in all our major product groups. Ladieswear saw a
sales increase of 19% to £167m with strong increases in both casual clothing and
from the trend towards smarter, more tailored, outfits. The number of lines and
the range of sizes and fittings has continued to increase to give our customers
a greater choice whatever their size and shape. Footwear sales have risen by
10%, the expansion of the styles appealing to our younger customers being
particularly important. This is also a major factor behind the 17% increase in
sales of menswear to £21m, although this category still only accounts for 10% of
our total clothing sales at present. Home and leisure sales rose by 5% to £66m,
representing 23% of total sales, with the electrical and household textile
ranges being particularly strong.

Online Sales

E-commerce is at the heart of our business strategy. During the period online
sales have risen by 40% to £73m and now represent over 25% of all sales compared
with 21% last year. This is due to a number of factors. More customers, whatever
their age, are selecting the internet as their channel of choice, and we are
encouraging this trend by a continuous improvement programme for our website
functionality and a growing number of internet-only product offers. The result
is that we have increased online order values to over 25% above those of
telephone orders through proactive cross-marketing within our portfolio of over
forty websites, each of which represents a product or customer niche. These
higher order values, and the bypassing of the contact centre, also help to drive
significant operational cost efficiencies.

Gross and Operating Margins

The rate of gross margin of 55.5% (2006, 56.5%) has remained in line with that
at the full year, and was better than expected for two reasons. The mix of
products was favourable and the increasing proportion of younger customers did
not have as much impact on the rate of bad debt as we had anticipated. Changes
to our credit scoring and credit limit policies have resulted in a planned
increase in the rate of bad debts over the last 18 months because they produce
incremental sales for little additional marketing cost, thereby boosting
profitability. Our credit policies remain conservative relative to the revenue
generated by customers who pay on deferred terms.

Operating costs in home shopping have risen by only 10.6%, well below the rate
of sales growth, with efficiencies arising in both distribution and selling and
administrative costs due to the growth of internet sales and the continuing cost
reduction programme. Consequently we have seen a further rise of 0.3% in the
home shopping operating margin to 14.3% (2006, 14.0%).

The service provided to our customers has continued to improve. The £10m project
to construct bulk and hanging garment warehouses at our Hadfield site was
completed successfully in May. This has helped to deliver record levels of
productivity in the distribution centres and speeded up the time taken for
despatch of customers' orders. Improvements to our product specifications have
delivered a 0.3% reduction in the rate of goods returned by customers. The
combination of all our service enhancements has resulted in a 10% reduction in
enquiries to our contact centre, which will also aid customer retention in the
future.

Zendor

Zendor, our fulfilment services business, has delivered an operating profit of
£0.2m, compared with an interim loss of £0.1m last year. Revenue of £3.8m was
below last year's £4.6m, but new contracts which have started recently for
Woolworths, Peacocks and Reiss, together with a strong prospect pipeline, should
improve the situation going forward.

Borrowing Facilities

The group has committed borrowing facilities of £320m until 2012, of which £243m
were utilised as at 25 August 2007. The primary facilities are a £200m
securitisation programme through an HSBC A-1/P1 rated conduit which has no
exposure to the US sub-prime mortgage market and has a matching standby
facility, and £120m of bilateral loans from HSBC and Royal Bank of Scotland. In
addition at 25 August 2007 the group had cash balances of £40m.

Current Trading and Outlook

Group sales for the six weeks ended 6 October 2007 on a like-for-like basis are
up by 11.1% on the same period last year. We have launched two new catalogues
this autumn:

   • Marisota is targeted at middle-aged women who have not previously been
    home shoppers who we can now attract to our clothing ranges by featuring the
    variety of sizes, lengths, colours and fittings available.

   • Jacamo aims to increase our share of the menswear market by targeting
    men aged 30 to 45 with a range of clothing which includes a high branded
    content available, often exclusively to us, in the larger chest and waist
    sizes.

The early results from these new initiatives are very encouraging and together
with the successful launches in spring of Simply Yours (an upmarket lingerie
catalogue) and Simply Be Home (a selection of home and leisure products which
appeal to our younger customers), are demonstrating that we can attract new
customers to our business utilising a combination of direct response television,
public relations activity and search engine advertising, coupled with a
compelling product proposition.

These initiatives are investments for the future whereas the results for the
second half will be dependent on the success from expanding our existing
catalogues and mid-season mailings, the largest of which will be our upgraded
Christmas Gifts catalogue. External factors, such as the dispute between the
Royal Mail and the Union of Communication Workers and general economic
conditions, may influence consumer spending patterns. However we believe the age
and socio-demographic distribution of our customer base gives our business
resilience in the event of a downturn.

The results achieved in the first half, coupled with the encouraging trading in
the second half to date, give the board confidence that the management and staff
can deliver another strong performance for the year as a whole.

Lord Alliance of Manchester, CBE

9 October 2007

Unaudited consolidated income statement

                                    26 weeks to 26 weeks to 52 weeks to
                                      25-Aug-07   26-Aug-06   24-Feb-07
                               Note          £m          £m          £m

Revenue - continuing              3       290.6       255.8       533.8
operations                          ------------------------------------


Operating profit -                3        41.2        35.0        76.4
continuing operations

Investment income                           2.1         1.4         2.7
Finance costs                             (9.2)       (5.5)      (11.3)
Fair value adjustments to                   0.2       (1.7)       (2.4)
financial instruments              ---------------------------------------


Profit before taxation                     34.3        29.2        65.4

Taxation                          5       (9.8)       (8.3)      (18.5)
                                   ---------------------------------------

Profit for the period from                 24.5        20.9        46.9
continuing operations

Loss for the period from          4           -       (1.2)       (1.2)
discontinued operations             --------------------------------------


Profit attributable to                     24.5        19.7        45.7
equity holders of the parent        --------------------------------------


Earnings per share from           6
continuing operations
Basic                                     9.14p       7.09p      15.89p
Diluted                                   9.03p       7.05p      15.80p

Earnings per share from           6
continuing and discontinued
operations
Basic                                     9.14p       6.68p      15.48p
Diluted                                   9.03p       6.64p      15.40p



Unaudited consolidated statement of recognised income and expense

                                26 weeks to  26 weeks to 52 weeks to
                                  25-Aug-07    26-Aug-06   24-Feb-07
                                         £m           £m          £m

Exchange differences on               (0.1)        (0.2)         0.4
translation of foreign
operations
Actuarial gains on defined              5.3          2.9         8.3
benefit pension schemes
Tax on items recognised               (1.9)        (0.9)       (0.5)
directly in equity                   --------------------------------
Net income recognised directly          3.3          1.8         8.2
in equity

Profit for the period                  24.5         19.7        45.7
                                     --------------------------------

Recognised income for the              27.8         21.5        53.9
period attributable to equity
holders of the parent                --------------------------------



Unaudited consolidated balance sheet

                                  25-Aug-07    26-Aug-06    24-Feb-07
                                         £m           £m           £m

Non-current assets
Intangible assets                      30.7         29.5         30.9
Property, plant & equipment            71.3         63.9         68.9
Deferred tax assets                     7.8          9.8         11.3
                                    ---------------------------------
                                      109.8        103.2        111.1
                                    ---------------------------------

Current assets
Inventories                            64.3         53.0         54.9
Trade and other receivables           384.3        341.2        359.2
Cash and cash equivalents              40.9         38.7         40.0
                                     --------------------------------
                                      489.5        432.9        454.1
                                     --------------------------------

Total assets                          599.3        536.1        565.2
                                     --------------------------------

Current liabilities
Bank overdrafts                       (0.2)        (0.2)        (0.2)
Trade and other payables            (104.7)       (78.7)       (83.7)
Derivative financial                  (1.5)        (1.0)        (1.7)
instruments
Provisions                                -        (2.0)            -
Dividends declared                        -            -       (79.9)
Current tax liability                (15.2)       (18.1)       (18.6)
                                    ---------------------------------
                                    (121.6)      (100.0)      (184.1)
                                    ---------------------------------

Net current assets                    367.9        332.9        270.0
                                    ---------------------------------

Non-current liabilities
Bank loans                          (243.0)      (143.8)      (143.8)
Retirement benefit obligation         (7.9)       (32.2)       (27.7)
Deferred tax liabilities              (9.0)        (4.8)        (7.1)
                                   ----------------------------------
                                    (259.9)      (180.8)      (178.6)
                                   ----------------------------------

Total liabilities                   (381.5)      (280.8)      (362.7)
                                   ----------------------------------

Net assets                            217.8        255.3        202.5
                                   -----------------------------------

Equity
Share capital                          30.0         29.5         29.6
Share premium account                  11.0          9.5         10.3
Own shares                            (0.3)        (0.5)            -
Foreign currency translation            0.3        (0.2)          0.4
reserve
Retained earnings                     176.8        217.0        162.2
Total equity                          217.8        255.3        202.5
                                   ----------------------------------







Unaudited consolidated cash flow statement



                                26 weeks to  26 weeks to  52 weeks to
                                  25-Aug-07    26-Aug-06    24-Feb-07
                                         £m           £m           £m

Net cash from operating                 9.7         19.3         42.8
activities

Investing activities
Purchases of property, plant          (5.0)        (5.3)       (12.9)
and equipment
Purchases of intangible assets        (3.0)        (3.1)        (8.0)
Acquisition of subsidiary                 -        (7.1)        (7.3)
Interest received                       0.7          0.6          1.0

Net cash used in investing            (7.3)       (14.9)       (27.2)
activities                           ---------------------------------

Financing activities
Interest paid                         (7.5)        (4.1)        (8.0)
Dividends paid                       (94.2)       (13.1)       (19.6)
Increase in bank loans                 99.2            -            -
Proceeds on issue of share              0.7          0.3          0.5
capital
Proceeds on issue of shares             0.3          0.1          0.4
held by ESOT

Net cash used in financing            (1.5)       (16.8)       (26.7)
activities                           ---------------------------------


Net increase/(decrease) in              0.9       (12.4)       (11.1)
cash and cash equivalents
Opening cash and cash                  40.0         51.1         51.1
equivalents

Closing cash and cash                  40.9         38.7         40.0
equivalents                          ---------------------------------





Reconciliation of operating profit to net cash inflow from operating activities

                                26 weeks to  26 weeks to  52 weeks to
                                  25-Aug-07    26-Aug-06    24-Feb-07
                                         £m           £m           £m

Operating profit from                  41.2         35.0         76.4
continuing operations
Operating loss from                       -        (1.7)        (1.7)
discontinued operations

Adjustments for:
Depreciation of property,               2.6          2.5          5.1
plant and equipment
Amortisation of intangible assets       3.2          3.3          7.0
Share option charge                     0.8          0.6          1.2
                                     ---------------------------------

Operating cash flows before            47.8         39.7         88.0
movements in working capital

(Increase)/decrease in inventories    (9.4)          2.0            -
Increase in trade and other          (24.8)       (14.9)       (32.5)
receivables
Increase/(decrease) in trade           20.3        (1.7)          1.4
and other payables
Pension obligation adjustment        (14.5)        (0.1)          0.1
                                     ---------------------------------

Cash generated by operations           19.4         25.0         57.0

Taxation paid                         (9.7)        (5.7)       (14.2)

Net cash from operating                 9.7         19.3         42.8
activities                           ----------------------------------




Notes to the interim financial statements


1.   Basis of preparation


The group's interim results for the 26 weeks ended 25 August 2007 were approved
by the board of directors on 9 October 2007, and have been prepared in
accordance with IAS 34 'Interim Financial Reporting'.

The accounting policies adopted in the preparation of the interim financial
statements are consistent with those disclosed in the annual report & accounts
for the 52 weeks ended 24 February 2007.

The financial information for the 52 weeks ended 24 February 2007 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of those accounts have been delivered to the Registrar of
Companies.The auditors' report on those accounts was unqualified and did not
contain any statement under Section 237 (2) or (3) of the Companies Act 1985.

In the current financial year, the group will adopt International Financial
Reporting Standard 7 'Financial instruments: Disclosures' (IFRS7) for the first
time. As IFRS7 is a disclosure standard, there is no impact of that change in
accounting policy on the half-yearly financial report.


2.   Risks and uncertainties


There are a number of risks and uncertainties which could have a material impact
on the group's long-term performance. They include the potential threat from our
competitors; our relationship with key suppliers; the loss of key personnel;
potential disruption to our key information systems, warehousing or call centre
facilities arising from events beyond our control such as fire or other issues
which could have a detrimental impact on sales and profit; changes to the
regulatory environment that the business operates under, primarily regulated by
the Financial Services Authority and the Office of Fair Trading.

The directors routinely monitor all these risks and uncertainties and
appropriate actions are taken to mitigate these risks, such as having business
continuity procedures in place, a dedicated team assessing regulatory
developments, ensuring we treat our customers fairly and hosting regular reviews
with all of our strategic partners. The board are also committed to invest
continually in updating its systems and infrastructure to keep pace with new
technology.


3. Segmental Analysis

                                26 weeks to  26 weeks to  52 weeks to
                                  25-Aug-07    26-Aug-06    24-Feb-07
                                         £m           £m           £m
Analysis of revenue

Continuing operations
Home shopping                         286.8        251.2        523.8
Fulfilment                              3.8          4.6         10.0
                                      290.6        255.8        533.8
                                    ---------------------------------

Analysis of operating profit
Continuing operations
Home shopping                          41.0         35.1         76.3
Fulfilment                              0.2        (0.1)          0.1
                                       41.2         35.0         76.4
                                    ---------------------------------



4. Discontinued operations

                                26 weeks to  26 weeks to  52 weeks to
                                  25-Aug-07    26-Aug-06    24-Feb-07
                                         £m           £m           £m
Revenue
Door to door selling                      -          4.6          4.6
                                       ------------------------------
                                     

Operating loss
Door to door selling                      -        (1.4)        (1.4)

Loss on disposal of                       -        (0.3)        (0.3)
discontinued operations
Attributable tax credit                   -          0.5          0.5
                                        -----------------------------
Net loss attributable to                  -        (1.2)        (1.2)
discontinued operations                 -----------------------------



5. Taxation


The taxation charge for the 26 weeks ended 25 August 2007 is based on the
estimated effective tax rate for the full year.


6. Earnings per share


The calculation of earnings per share from continuing operations is based on the
profit for the period from continuing operations of £24.5m (2006, £20.9m) and
the weighted average number of shares in issue during the period of 268,038,000
(2006, 294,923,000).

The calculation of earnings per share from continuing and discontinued
operations is based on the profit attributable to equity holders of the parent
of £24.5m (2006, £19.7m) and the weighted average number of shares in issue
during the period of 268,038,000 (2006, 294,923,000).

For diluted earnings per share, the weighted average number of shares of
271,281,000 (2006, 296,511,000) has been calculated after adjusting for the
potential dilutive effect of outstanding share options.



7. Reconciliation of equity

                               26 weeks to  26 weeks to   52 weeks to
                                 25-Aug-07    26-Aug-06     24-Feb-07
                                        £m           £m            £m

Total recognised income for           27.8         21.5          53.9
the period
Equity dividends declared           (14.3)       (13.1)        (19.6)
B share dividend declared                -            -        (79.9)
Issue of ordinary share                1.1          0.3           1.2
capital
Purchase of own shares by ESOT        (0.4)            -         (0.7)
Issue of own shares by ESOT            0.3          0.1           0.4
Share option charge                    0.8          0.5           1.2
                                     ----------------------------------

Total movement during the             15.3          9.3        (43.5)
period

Equity at the beginning of           202.5        246.0         246.0
the period

Equity at the end of the             217.8        255.3         202.5
period                               ----------------------------------




8. Dividends


The directors have declared and approved an interim dividend of 2.65 pence per
share (2006, 2.19p). This will be paid on 4 January 2008 to shareholders on the
register at the close of business on 7 December 2007.



Responsibility statement:


We confirm that to the best of our knowledge:


(a) the condensed set of financial statements has been prepared in
accordance with IAS 34;

(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first 26 weeks
and description of principal risks and uncertainties for the remaining twenty
seven weeks of the year); and

(c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related party transactions and changes
therin).


By order of the Board


Alan White                                                     Dean Moore
Chief Executive                                                Finance Director

9 October 2007




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