Noni B posts fourth consecutive year of like-for-like sales growth

Noni B posted its fourth consecutive year of like-for-like sales growth, which, alongside the strong performance of the Pretty Girl business, helped lift group total revenue 17.6 per cent year on year to $372.4 million.

Noni B Group’s like-for-like sales growth was up 4.5 per cent on FY17, with all four brands – Noni B, Rockmans, W.Lane and beme – delivering positive comparable store growth for the year, with a particularly strong performance in the second half.

“The 2018 financial year has been another successful year for Noni B Group, achieving strong financial results and pleasing like-for-like sales growth in an increasingly competitive market,” Noni B Group chairman Richard Facioni said.

Group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were $37.2 million, representing a 67.2 per cent increase on FY17.

Group statutory after-tax profit grew 431 per cent to $17.3 million, compared to $3.3 million in FY17.

The group attributed the more than five-fold increase to fiscal 2018 being the first full year to realise the synergies from Noni B’s 2016 acquisition of James Packer’s Pretty Girl Fashion Group.

Since the acquisition, the group has made supply chain improvements, gotten rid of duplicate functions and achieved operational efficiencies in the Pretty Girl brands, including closing 23 stores and opening 50 new stores, with 27 net new stores opened across Australia.

The group has also made significant investment in the online teams and systems, resulting in online sales growing 67.8 per cent year on year to $20  million, which represents 5.8 per cent of group sales.

Specialty Fashion assets

Noni B finalised its $31 million cash acquisition of Specialty Fashion Group’s Millers, Katies, Rivers, Crossroads and Autograph brands on July 2, adding 785 stores to its portfolio and almost trebling annual revenue to approximately $1 billion.

“With the acquisition of the Specialty Fashion Group assets, Noni B Group has now become one of the pre-eminent women’s apparel retailers in Australia, retaining our solid, focused market position,” Noni B managing director Scott Evans said.

The group raised $40 million to fund the acquisition through an institutional placement and accelerated non-renounceable entitlement offer at $2.50 per share in May, a move the retailer noted was supported by shareholders, including its largest shareholder, Alceon.

FY19 outlook

The group did not provide any specific guidance for fiscal 2019, but noted that the Specialty Fashion assets have been trading at a loss. Facioni said the team will be focused on addressing the businesses’ underlying issues, though early indications following the completion of the acquisition “encouraging”.

A statement referred to FY19 as a “year of transformation” for the group. The retailer said Noni B and Specialty Fashion Group’s management teams have been actively working on an integration plan, consistent with Noni B’s prior acquisitions.

The group said it is pleased with progress made to date and expects to deliver on the previously outlined benefits from the enlarged group, including full year run-rate cost savings in the order of $30 million.

“The group has made strong progress during the past four years, turning around four underperforming businesses and delivering consecutive annual like-for-like sales growth in the Noni B brand and, in-turn, the Pretty Girl brands,” Evans said.

“We now look forward to taking advantage of the many opportunities offered by our newly expanded group.”

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