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LONDON (AFX) - Debenhams PLC, the UK's second largest department store group, which rejoined the stock market in May, said it expects to report a year to Sept 2 underlying pretax profit in line with hopes at the time of its IPO.
The profit guidance came in a trading update published ahead of the retailer's full year results on Oct 24.
The group, which now trades from 131 department stores and five smaller format Desire by Debenhams stores in the UK and Ireland as well as 30 international stores, said its full year sales increased by 6.6 pct compared to the previous year, while like-for-like sales, which strip out the impact of new space, were up 0.5 pct.
'As expected, gross margins continue to improve; this together with encouraging sales growth and continued cost focus means that Debenhams expects to report that profit before taxation and exceptional items is in line with the board's expectations at the time of the IPO,' it said.
Rob Templeman, Debenhams' chief executive, noted that although the UK retail market was challenging in the early part of the summer, 'there are signs that trading conditions are improving'.
'We continue to successfully manage our stocks and remain confident that the rigorous delivery of our strategy, together with our store expansion programme, will continue to drive the growth potential of Debenhams.'
The retailer has a pipeline of 25 new department stores and three Desire stores. It sees scope for 240 department stores and 100 Desire stores.
Debenhams shares closed Friday at 192 pence, valuing the business at 1.65 bln stg. newsdesk@afxnews.com jdd/abr/har COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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