Noni B Group has recorded sales growth of 140% to $464 million for the half year.
The result follows its acquisition of five brands from Specialty Fashion Group in July, including Millers and Katies.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were up 31$ to $29.1 million for the half year to December 30.
Noni B Group MD Scott Evans said strong Christmas trading resulted in like-for-like sales growth of +1% for the month of December.
‘We are very pleased to see a much improved November and December trading result.
"This is a direct outcome of the core strategies implemented post acquisition to rebuild the acquired five brands’ product range, variety and stock levels along with enhanced emphasis on each brand’s specific customer base.
‘In addition, our continued focus on operating costs across the Group remains on track to deliver the previously announced additional cost synergies of $20 million by 30 June 2019, over the achieved $30 million (on an annual basis).
"Above this, we anticipate further efficiencies and margin improvements to add to the FY20 earnings.
‘During this period, we have completed the majority of the integration required across the Group. This has included consolidating supply chains, systems and reporting as well as establishing a single support centre so learnings can be shared and we can take advantage of the vast array of data we gather.
‘Putting the customer at the heart of everything we do underpins all aspects of our business.
"This includes creating an environment in our stores where customers feel comfortable and confident and where it builds their emotional engagement with our collections and store teams.
"While we still have some way to go, we have begun to create a more customer-focused experience in our five new brands’ stores and this will have increasing impact as we roll out new store designs.
‘We have continued to invest in our online presence. Sales through online channels grew by +27.9% representing 9.0% of total sales during the period, up from 5.8% in FY2018.’
Noni B was acquired by private equity firm Alceon in November 2014, with Pretty Girl Fashion Group acquired two years later and Specialty Fashion Group purchased in July 2018.
Noni B Limited chariman Richard Facioni said it is now the largest womenswear specialty group in Australia.
‘The acquisition of the loss-making Specialty Fashion Group brands for $31m in July 2018 more than doubled the company’s size, creating one of Australia’s leading retail fashion Groups with over 1,400 stores.
"At the time, we anticipated restoring the acquired brands to EBITDA break-even in FY2019, and we are delighted that now we expect them to achieve positive EBITDA for the current year.
‘This better-than-expected turnaround during a challenging period for the retail sector has accelerated Noni B’s development into a sustainable business with considerable opportunities for further growth, capitalising on the Group’s robust financial position.
‘We’re also very pleased to announce a continuation of Noni B’s payment of dividends, reflecting the Groups sustainable, and growing, underlying profitability."
Facioni said he expected the remainder of the year to be challenging.
"Whilst like-for-like sales growth has continued into the second half, we expect the market to remain challenging.
"However Noni B reaffirms its EBITDA continues in line with market consensus of approximately $45 million for the full FY19 financial year, subject to trading leading up to the all-important Mother’s Day trading period.
"This compares with the combined pro-forma EBITDA of $31.1m achieved by the Noni B Group and the five Specialty Fashion Group brands in the 2017 calendar year.
As anticipated at Noni B’s annual general meeting in November 2018, the company expects the full year benefit of synergies, together with improvements in gross margin, to result in FY20 EBITDA exceeding $75m consistent with market consensus.