Don't worry about Debenhams' (DEB) headline profit fall - the previous year's accounting period covered an extra week and, on a like-for-like basis, pre-tax profit at the department store operator rose 4.2 per cent. In-store sales were flat, but group like-for-like sales grew 2.3 per cent - thanks to a 39.8 per cent jump in online sales to £250.6m - leading management to upgrade the medium-term online sales target by £100m to £600m. The shares rose 5 per cent on the back of these figures and more upside looks likely.
In the UK, Debenhams refurbished 18 stores, with the remaining 30 stores due for modernisation by end-2014. The group also opened three new UK stores, one after the period ended, and management reckons that the 17 new stores in the pipeline could add £150m of sales over the next five years. Moreover, 10 overseas franchise stores were also opened, taking the total to 71 in 26 countries. Moreover, strong cash generation enabled £20.1m to be returned to shareholders through share buybacks and helped cut net debt by £15m - finance costs fell £9.4m to £17.9m.
Peel Hunt expects adjusted pre-tax profit of £168.6m for 2013, giving EPS of 10.2p.
DEBENHAMS (DEB) | ||||
---|---|---|---|---|
ORD PRICE: | 115p | MARKET VALUE: | £1.45bn | |
TOUCH: | 114-115p | 12-MONTH HIGH: | 118p | LOW: 56p |
DIVIDEND YIELD: | 2.9% | PE RATIO: | 12 | |
NET ASSET VALUE: | 52p* | NET DEBT: | 56% |
Year to 1 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2008 | 1.84 | 106 | 9.00 | 3.00 |
2009 | 1.92 | 121 | 10.0 | nil |
2010 | 2.12 | 140 | 7.50 | nil |
2011** | 2.21 | 160 | 9.10 | 3.00 |
2012 | 2.23 | 158 | 9.80 | 3.30 |
% change | +1 | -1 | +8 | +10 |
Ex-div: 5 Dec Payment: 11 Jan *Includes intangible assets of £865m, or 68p a share **53 weeks |