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| | | | 21/10/2011 | Financial Times, Claer Barrett - Debenhams plans to return cash to shareholders | | | | | Debenhams reports turnaround | | | | | Debenhams reports that despite tough conditions on the high street, pre-tax profits rose nearly 15 per cent to £160.3m in the 53-week period to September 3. This was flattered by a £15m reduction in the group’s interest charge following its recent refinancing, and an additional £8m of profit generated in the extra week’s trading, which covered the August bank holiday weekend.
Michael Sharp, chief executive, said the group 'intended' to conduct a share buy-back in the second half of the current financial year, which some analysts think could be worth up to £50m, about 6 per cent of its current market capitalisation.
Debenhams paid down 25 per cent of its debts in the period, ending the year with net debt of £383m. A final dividend of 2p was declared, bringing the full-year dividend to 3p a share.
"This demonstrates our confidence that we can grow the business, even though the market will be difficult," Mr Sharp said. The cash return marks a remarkable turnround for the retailer, which was floated by its previous private equity owners in 2006 with £1.1bn of debt, and suspended dividend payments in 2008.
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