Debenhams beats forecasts

Annual profit at Debenhams roses 10 per cent after price cuts helped it win market share. Photograph: Paul Thomas/Bloomberg

The firm, which trades from 169 stores in Britain, Ireland and Denmark as well as 64 franchised outlets in 25 countries, said it made an underlying pretax profit of £166.1 million (€190.5 million) in the 53 weeks to September 3rd.

That compares with analysts' average forecast of £162 million, according to a company poll.

Debenhams, ranked second after employee-owned department store chain John Lewis said total sales, reported last month along with details of its market share gains, rose 2.9 per cent to £2.68 billion, with sales at stores open over a year down 0.3 per cent.

The group's strategy is to drive profits by investing some of its gross margin into pushing sales.

"It is right to remain cautious about the strength of consumer confidence over the next 12 months, given the uncertain economic outlook," said Chief Executive Michael Sharp. "Overall we are optimistic about our prospects."

Debenhams, which ended the period with net debt of £383.7 million, down £133.1 million since the start of the year, is paying a total dividend of 3 pence after paying nothing last year.

The firm said it intended to commence a share buyback programme in the second half of the 2012 financial year.

Shares in the retailer, which returned to the stock market at 195 pence in 2006 after two-and-a-half years in private equity hands, have lost 12 per cent of their value over the last year.

Reuters 

• Email Us
• |