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Debenhams H1 profit up on last year on a 0.3% increase in sales
Debenhams, Britain's second-largest department store group, said first-half profit would exceed the prior year's level as it posted a small rise in underlying sales along with better gross margins. Detailed interim results will be published on April 13th.
"As a result of higher sales and gross margin, EBITDA and profit before tax for the first half are both expected to be higher than last year and in line with market forecasts," the firm said today.
Debenhams posted a 0.3% rise in sales at stores open over a year for the 26 weeks to February 27 and said it was winning market share.
That outcome compares with analysts' consensus forecast of flat like-for-like sales, according to a company poll, and a rise of 0.1% for the 18 weeks to January 2.
Gross transaction value increased 1.7%, compared with analysts' consensus forecast of up 1.5%.
Rob Templeman, Chief Executive of Debenhams, said:
"We are pleased with our first half performance which shows continued progress in delivering our strategy. In 2009 we were one of only a handful of retailers to increase sales, margins and profits and we have done so again in the first half of 2010. Against the backdrop of challenging trading conditions, we have delivered profit growth on a consistent basis for the past 18 months.
"In the second half we will continue to focus on our self-help measures. The impact of the disruption we saw in the fourth quarter of last year due to the closure of concessions and the significant space shift will start to dissipate and we expect to benefit from enhanced space productivity in the second half from our new brands. Our strong own bought offer, not least the successful and exclusive Designers at Debenhams brands which bring the catwalk to the high street, will remain our key driver of growth."
Debenhams, with nearly 160 stores in Britain and Ireland and more than 50 franchised outlets overseas, is shifting from low margin concessions by devoting more space to own-brand products.
As own-brand products are lower priced than those sold through concessions, sales values are impacted. However, own-brand products are higher margin, so profitability improves.
The firm said its gross margin for the period was "significantly higher" than the previous year.
If forecast year-end net debt within the range of market forecasts.
Shares in Debenhams have nearly doubled over the last year, helped by a £323-million equity fundraising in June which put an end to worries about its debt.
The firm had been dogged by concerns about its borrowing since returning to the stock market at 195 pence a share in 2006 after two-and-a-half lucrative years in private equity hands.
The stock closed yesterday at 71 pence, valuing the business at £914 million.
"As a result of higher sales and gross margin, EBITDA and profit before tax for the first half are both expected to be higher than last year and in line with market forecasts," the firm said today.
Debenhams posted a 0.3% rise in sales at stores open over a year for the 26 weeks to February 27 and said it was winning market share.
That outcome compares with analysts' consensus forecast of flat like-for-like sales, according to a company poll, and a rise of 0.1% for the 18 weeks to January 2.
Gross transaction value increased 1.7%, compared with analysts' consensus forecast of up 1.5%.
Rob Templeman, Chief Executive of Debenhams, said:
"We are pleased with our first half performance which shows continued progress in delivering our strategy. In 2009 we were one of only a handful of retailers to increase sales, margins and profits and we have done so again in the first half of 2010. Against the backdrop of challenging trading conditions, we have delivered profit growth on a consistent basis for the past 18 months.
"In the second half we will continue to focus on our self-help measures. The impact of the disruption we saw in the fourth quarter of last year due to the closure of concessions and the significant space shift will start to dissipate and we expect to benefit from enhanced space productivity in the second half from our new brands. Our strong own bought offer, not least the successful and exclusive Designers at Debenhams brands which bring the catwalk to the high street, will remain our key driver of growth."
Debenhams, with nearly 160 stores in Britain and Ireland and more than 50 franchised outlets overseas, is shifting from low margin concessions by devoting more space to own-brand products.
As own-brand products are lower priced than those sold through concessions, sales values are impacted. However, own-brand products are higher margin, so profitability improves.
The firm said its gross margin for the period was "significantly higher" than the previous year.
If forecast year-end net debt within the range of market forecasts.
Shares in Debenhams have nearly doubled over the last year, helped by a £323-million equity fundraising in June which put an end to worries about its debt.
The firm had been dogged by concerns about its borrowing since returning to the stock market at 195 pence a share in 2006 after two-and-a-half lucrative years in private equity hands.
The stock closed yesterday at 71 pence, valuing the business at £914 million.
Tue, 16th Mar 2010