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New Look records profits jump as sales rise

New Look saw underlying profit jump 53.5% in the first half of this year on the back of strong sales growth of 6%.

The fast fashion retailer recorded group revenues of £753.2m for the 26 weeks to September 28, with like-for-likes up 1.9%. UK sales rose 5% to £579.4m, up on £551.6m last year, with UK like-for-likes up 2.6%. Ecommerce sales rose 78.8%, with New Look’s own website up 52.9%.

Adjusted EBITDA rose 19.3% to £103.7m, while underlying operating profit rocketed from £46.2m to £70.9m.

New Look made a pre-tax profit of £13.8m, reversing last year’s loss of £13.6m and following a full year profit of £3.1m reported in June, on the back of a £54.5m loss the year before.

The first half results come on the back of a busy year for the business, which saw its £800m debt burden refinanced in April and sweeping changes to the senior management in June, as well as the hire of a new team including international managing director Bernhard Ruf, who joined from stationery retailer Staples.

It has also secured eight leases in China ahead of launch next spring.  

Chief executive Anders Kristiansen, who joined in January, said: “Our strategy is delivering, and there is real momentum in the business. I am particularly pleased with the margin improvement brought about by our continued focus on cost control, tight stock management and reduced discounting.

“E-commerce continues to power ahead. The improved functionality of our site and enhanced delivery options have been well received by customers and we are continuing to invest in this very important part of our business.

“Internationally the opportunity is huge. We are doing our due diligence carefully but we are on track to open our first Chinese store by spring 2014.

“In line with the rest of the sector, current trading is more challenging and as yet we are not seeing any benefits of economic recovery feed through to our customers’ pockets. However, we are confident that the strength of New Look’s offer, namely our product, our website, our stores and our people means that we are well placed for the busy Christmas trading period and beyond.”

The results come as New Look annouced its chief financial officer is stepping down after 13 years at the business to “concentrate on building a portfolio career”.

Alastair Miller has been at New Look since 2000 and will serve in his current role until a successor has been appointed.

Non-executive chairman Alistair McGeorge thanked Miller for his work, adding; “His commitment to the business has been exemplary and he will remain in his role until his eventual successor is identified to ensure that there is a smooth transition. He leaves with our very best wishes.”

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