UK retailer New Look swings to small profit

LONDON - British value fashion retailer New Look made a small annual pretax profit after removing costs and improving sales and margins as part of a recovery plan following its slump to a loss in 2011/12.

The firm, owned by private equity groups Apax and Permira and founder Tom Singh, also said on Tuesday it ended its financial year with net debt of 1.1 billion pounds ($1.68 billion) after a refinancing that extended maturities to 2018.

"Our long term goal remains the same: to de-lever the business through profit growth and strong cashflow," said Chairman Alistair McGeorge.

Many British retailers are finding the going tough as consumers hold back spending in the face of job insecurity, rising prices, subdued wages growth and government austerity measures.

New Look, which trades from over 1,100 stores across 32 countries, made a pretax profit of 3.1 million pounds in the year to March 30.

That compared to a loss of 54.5 million pounds in the same period last year.

Group sales rose 2.5 percent to 1.48 billion pounds, with sales at stores open over a year falling 0.7 percent but online sales jumping 50.1 percent.

Gross margins improved 2 percentage points, reflecting tighter stock controls and lower markdowns.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29 percent to 189.2 million pounds.

New Look added that it plans to develop new markets in eastern Europe and Asia - specifically Russia and China.

A first Chinese store will open in March 2014.