Shares in retailer dip despite profit rethink
Published 21/09/2011 | 05:00
Shares in British retailer Debenhams dipped yesterday, even as it said that profits for the financial year will be better than previously expected. Investors remain wary about the prospects for 2012, as consumers continue to battle against economic headwinds.
Debenhams, which operates 11 stores in Ireland, is the UK's second biggest department store and a bellwether for the health of the high street.
Delivering a trading update in advance of releasing its full-year results next month, Debenhams said like-for-like sales, excluding VAT, fell 0.3pc in the 52 weeks to the end of August.
Its online business performed strongly. Underlying pretax profit should beat forecasts of £158m (€181m), and is likely to come in at about £164m, according to Debenhams' finance director Chris Woodhouse.
The retailer, which also has operations in Denmark, said it has managed to keep stock firmly under control, while it slashed net debt to about £385m at the financial year end -- a £130m reduction since the start of the fiscal period.
"We believe our decision to maximise cash profit by investing in top-line growth has proven successful and this will result in headline profit before tax for the year coming in ahead of consensus forecasts," chief executive Michael Sharp said yesterday.
He maintained there would be "winners and losers" in the current market and insisted that Debenhams would continue to be "one of the winners".
Analysts generally responded positively to the latest set of figures, but some questioned whether the upgrade to the full-year figures was justified given the decline in like-for-like sales in the period.