N Brown is excited to share the highlights and milestones of the first half of FY24, even as we navigated through some industry challenges. Our H1 adjusted EBITDA results have met the expectations set by our board, and our liquidity remains strong. However, it’s important to acknowledge that we faced headwinds, resulting in a reported pre-tax loss.
Examining the figures closely, we observed a 10.4% drop in group revenue during the first half of FY24, totaling £297 million, with a corresponding 11.2% decline in product revenue to £187.5 million. The financial services sector also experienced a 9% decrease, settling at £109.5 million.
Our adjusted EBITDA, at £17.5 million, marks a 37.3% decrease, with the adjusted EBITDA margin decreasing to 5.9% from 8.4%. Adjusted profit before tax declined by 97.7%, amounting to £0.1 million, leading to a pre-tax loss of £4.1 million. It’s essential to note that this loss includes adjusting items of £4.5 million related to cost restructuring activities aimed at optimizing our operations.
The decline in revenue is attributable to market challenges, including unseasonable weather conditions during spring and July to August. Despite these hurdles, we observed a positive trend in product revenue during Q2, with our strategic brands outperforming the online pureplay market, showing only a 7.4% decrease.
We’re proud of our achievements, particularly the successful launch of a mobile-first website for Jacamo, a key transformational priority for us. Our Net Promoter Score (NPS) improved by 5 points, reflecting our focus on operational enhancements, such as extending the order cut-off for next-day delivery to 11pm.
As we look ahead to 2024, we have identified clear priorities to position our business for peak trading. We’ve successfully managed cost inflation through proactive measures, reducing adjusted operating costs by £4.7 million, which effectively offset inflationary pressures of approximately £7 million.
Our key brands, including Simply Be, JD Williams, and Jacamo, received high-profile marketing support during H1, and we expanded our platform with the addition of new third-party labels.
In addition, we introduced ‘Anthology,’ a premium line under JD Williams, offering high-quality, versatile fabrics. We’ve also extended the reach of our core labels by partnering with other retailers. For instance, Simply Be’s swimwear category has become a leading category at Next. The recent launch of Simply Be on Sainsbury’s online platform and selected stores is a significant milestone that exposes us to diverse customer segments.
Despite increased costs compared to the previous year, our balance sheet remains robust, and we maintain ample liquidity. We expect that our FY24 adjusted EBITDA will align with market expectations, and the initial five weeks of Q3 already show signs of further improvement.
CEO Steve Johnson is optimistic, stating, ‘While we anticipated a challenging first half of FY24 due to external market conditions, we responded decisively, adapting to the trading environment. We continue to invest in JD Williams, Simply Be, and Jacamo, fostering new commercial partnerships and technology upgrades to drive performance. We have a clear transformational roadmap in place and anticipate making further progress in the second half of the year.