January's snowy weather hit Debenhams' (DEB) end-of-winter sale, causing like-for-like sales to slide 10 per cent during the last two weeks of that month. Even February's heightened promotional activity didn't compensate and group first-half operating profit fell 5.5 per cent year on year to £127.5m.
Still, group like-for-like sales rose 3.1 per cent year on year, driven by a 4 per cent rise in UK online sales and 0.2 per cent sales growth overseas - which offset a 1.1 per cent sales decline at the group's UK stores. In fact, group online sales soared 46.2 per cent to £194.4m, well ahead of the market's 13 per cent growth rate. Nevertheless, snowy conditions caused UK operating profit to dip 6.8 per cent to £104.8m, although Debenhams saw a 1.3 per cent profit rise in its international operations.
Debenhams also wrote off £3.8m after closing six unprofitable Romanian franchise stores. Despite that, chief executive Michael Sharp insists international expansion is "right for long-term growth", and plans are on track to grow franchise stores from 62 to 150. Meanwhile, the UK store modernisation programme is proving successful, with a 6 per cent uplift in sales at the revamped stores.
Broker Oriel Securities expects adjusted pre-tax profit of £155m for 2013, giving adjusted EPS of 9.8p (9.8p in 2012).
| DEBENHAMS (DEB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 87p | MARKET VALUE: | £1.09bn | |
| TOUCH: | 87-87.2p | 12-MONTH HIGH: | 125p | LOW: 71p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 43% | |
| Half-year to 2 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.24 | 127 | 7.40 | 1.00 |
| 2013 | 1.28 | 120 | 7.60 | 1.00 |
| % change | +3 | -6 | +3 | - |
Ex-div: 5 Jun Payment: 5 Jul *Includes intangible assets of £873m, or 69p a share | ||||
