* H1 adjusted EBITDA 119.5 million stg vs 117.8 mln yr ago
* Like-for-like sales down 3 percent, UK down 4.5 percent
* Sees like-for-like growth remaining subdued
(Adds detail, background)
LONDON, Nov 11 (Reuters) - British budget fashion retailer New Look said market conditions were worsening and rising raw material costs meant prices were likely to have to rise next year, as it reported a small rise in first-half earnings.
The group, which in February postponed a planned flotation due to volatile financial markets, said on Thursday adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) edged up to 119.5 million pounds ($193 million) in the 26 weeks ended Sept. 25, compared with 117.8 million in the same period last year.
Sales at stores open over a year fell 3 percent, including a 4.5 percent drop in Britain where the group also suffered disruption from the move of its buying, merchandise and design teams, although it said it gained market share.
"Looking ahead, the consumer spending environment remains difficult, in addition to which, rising input costs and the impending increase in VAT (sales tax) are likely to result in price rises in the New Year," Chief Executive Carl McPhail said.
"We expect LFL (like-for-like sales) growth to remain subdued in such an environment."
New Look's downbeat outlook comes after discount fashion chain Primark warned on Tuesday higher cotton prices would hit margins. Mid-market group Next said last week price rises would be at the top end of its expectations.
New Look, taken private in 2004 by private equity firms Apax and Permira with founder Tom Singh, said in February it hoped to raise 650 million pounds in a flotation to reduce its more than 1 billion pounds of borrowings.
But investors were wary of the plan, particularly after department store chain Debenhams returned to the stock market in 2007 laden with debt and saw its shares plunge.
McPhail told Reuters last month he was cautious about prospects for reviving flotation plans next year. (Reporting by Mark Potter; Editing by David Holmes) ($1=.6192 Pound)