Debenhams profits edge up 1.4%
Department store chain Debenhams increased its profits by 1.4% to £127.1 million for the six months to 3 March, compared to the same period last year.
Revenue rose 1.3% to £1.23 million from £1.22 million the year before while like-for-like sales across the business increased by 1.4%.
Online sales grew by 34.7% to £124.3 million in the period with sales up by almost 150% on a two year basis. Online EBITDA increased by 36.4% as the initiatives taken to improve profitability in the business, particularly in relation to fulfilment costs, began to take effect.
Debenhams said it had continued to grow its multi-channel business by implementing a number of new intiatives which included the deployment of kiosks across the entire store base. The company said that Mobile was now its fastest growing channel with 20% of online traffic now generated by mobile devices.
The company has committed to modernising its 45 core stores in the UK and Ireland within the next two years, 20 of which will be carried out in the second half of the current financial year. Results from the 14 modernisations completed over the past 18 months have been encouraging with an average sales increase of around 6% and return on capital in the region of 15%.
The company now operates 164 stores across the UK and Ireland, with one new store opening in Newbury during the six month period. Debenhams said it believes there is potential for 240 "economically viable" stores.
Chief executive Michael Sharp said: "We are pleased with our results for the first half, with profit before tax ahead of market expectations despite the challenges presented by the overall retail climate and unfavourable weather conditions in the autumn.
"I set out the four pillars of our strategy to create a leading international, multi-channel brand in October last year. I am encouraged by the strong execution over the last six months and am confident of the long-term success of this strategy and the benefits it will bring to our business and our shareholders."
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