Debenhams margins on target.
Debenhams said gross transaction value for the first half to 26th February increased by 3.2% over the previous year.
Group like-for-like sales for the period were flat including VAT and down 1.5% excluding VAT.
Higher margins and the benefits of a lower interest charge helped offset the negative impact of December weather and dual running costs associated with the investment in a new distribution centre. Therefore headline profit before tax for the first half is expected to be ahead of last year and in line with market consensus.
Net debt at the end of the first half is expected to be in the region of £350m, a reduction of £160m against both the same point last year and the start of the current financial year.
Rob Templeman, CEO, said: “Our performance in the first half has been pleasing given the difficult trading environment. Our strategy of increasing own bought sales, as well as focusing on profit and cash generation, has again delivered margin gains despite the significant headwinds being experienced in the clothing sector supply chain.
“Looking forward, it is clear that disposable income is under pressure from inflation, public sector spending cuts and higher taxation. As a result, trading across the UK high street is likely to be difficult in the second half of the year. We will continue to pursue the self-help measures we have been working on over the past two years – driving market share and cash margin through own bought product ranges, increasing multi-channel access points, improving the instore environment through refits – which will be beneficial to the business whatever the trading environment.”
