Financial headlines
Gross transaction value up 1.3% to £2,860.1m
Group like-for-like sales up 2.1% in constant currency, up 0.6% as reported
Group gross margin rate maintained, with 90bps markdown improvement on last year
Operating profit up 4.3% to £134.1m reflecting good cost control
Profit before tax in line with market expectations, up 7.3% to £113.5m (2014: £105.8m1)
Basic EPS up 7.0% to 7.6p (2014: 7.1p)
Final dividend of 2.4p per share; maintaining full year dividend of 3.4p per share
Following strong cash generation, net debt reduced by £41.7m to £319.8m
Current net debt/EBITDA 1.3x (2014: 1.6x), medium term leverage target improved to 0.5x from previous target of 1.0x
Operational headlines
Further progress delivered against strategic priorities underpinning long-term sustainable growth
o Positive sales momentum continued against background of refocused promotional activity. Own brand full price sell-through increased by 7%, following a reduction of 17 days in the promotional calendar in the financial year - a total reduction since spring 2014 of 42 days
o Market share has improved as expected since the anniversary of promotional changes
o Tight stock management delivered 4.1% reduction in year-end closing stock and clean terminal stock position of 3.1% in line with long-term average
o Successful space optimisation trials moving to roll-out; 35% of targeted space now filled as planned with new brands, formats and services and on target to fill 50% by April 2016
Multi-channel service improvements delivered to plan. Online sales grew 11.4%2, representing 13.6% of Group sales, with online EBITDA up 11.5%. Mobile now accounts for over 40% of total online sales
International profit maintained despite adverse foreign exchange movements, continuing like-for-like momentum at Magasin du Nord
Strongest-ever brand launch with Nine by Savannah Miller now in 65 stores for autumn
Five new UK stores opening this autumn as planned, including Bradford where Debenhams will be the city's only department store; Rugby and Wandsworth already open and have started well
Development in multi-channel model internationally: entering Australian market with Pepkor SE Asia, a subsidiary of the Steinhoff Group, and new distribution arrangement for selected Debenhams brands with VinGroup of Vietnam
Michael Sharp, Chief Executive of Debenhams, said:
"We have delivered profits in line with market expectations, reflecting further progress against our strategic priorities. We have had an encouraging start to the year, with strong new product launches which have been well received by our customers, and we are in good shape to build on last year's strong performance over peak trading.
"Consequently, we are increasingly confident in the direction of the business and as a result we will accelerate our new initiatives, such as the roll-out of our successful space optimisation trials and new international growth opportunities.
"We have clear priorities for the uses of cash and our continued strong cash generation has enabled us to improve our leverage target and to adopt a progressive dividend policy as future earnings increase."
