Oct 22, 2009
Debenhams year profit up 14 pct, cuts debt
Oct 22, 2009
LONDON, Oct 22 (Reuters) - Debenhams (DEB.L), Britain's second-biggest department stores group, posted full-year profit towards the top end of expectations and said underlying sales had turned positive at the start of its new financial year.
The firm, with over 150 stores in Britain and Ireland and more than 50 franchised outlets overseas, said it cut debt by over 400 million pounds ($662 million) to 590.3 million in the year ended Aug. 29 and had repaid 100 million more since then.
It also said on Thursday 22 October that Chairman John Lovering would step down in March.
Profit before tax, goodwill and one-off items was 125.2 million pounds, near the top of analysts' forecast range of 115-126 million in a Thomson Reuters I/B/E/S Estimates poll.
Sales at stores open at least a year fell 3.6 percent, but were up 0.6 percent in the seven weeks to Oct. 17.
"The outlook for consumer behaviour remains hard to predict," Chief Executive Rob Templeman said.
"However, we are encouraged by the response of customers to the changes we have made to our offer, he added, referring to the firm's switch to more own-bought clothes, such as its Designers at Debenhams ranges, rather than concessions.
Debenhams shares have almost quadrupled in value this year, helped by a 323-million-pounds equity fundraising in June which put an end to worries about its debts.
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.
Britain's retailers are also starting to benefit from signs of recovery from recession. An industry survey last week showed retail sales growing at their fastest annual pace in September for five months.
Debenhams shares closed at 83.1 pence on Wednesday 21 October, valuing the business at about 1.1 billion pounds. ($1=.6045 pounds) (Reporting by Mark Potter; Editing by James Davey and Mike Nesbit)
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