Interviews
News Flash
Debenhams remains strongly cash generative
20 Sep '10
5 min read
Magasin continues to perform in line with expectations. The early signs of success from the introduction of Debenhams own bought products into the Magasin stores - especially Field's and Odense - have continued. We remain confident that Magasin will achieve the guidance previously provided.
Integrating the in-store and online activities has been the focus of the multi-channel business during 2010. Our aim is to provide the flexibility for customers to shop in the most convenient way for each purchase. The multi-channel business grew strongly in the year with Debenhams Direct sales for the 52 weeks up 88.4% (excluding VAT) compared with the previous year.
Debenhams remains strongly cash generative. Net debt as at 28 August 2010 will be better than market consensus. The process of refinancing Debenhams' debt facilities was completed in July, well ahead of the scheduled date of April 2011. The new £650 million senior facility comprises a £250 million term loan and a £400 million revolving credit facility expiring in October 2013 with an option to extend to October 2014.
Following a proportion of the debt being hedged into fixed rate finance, it is anticipated that the interest cost net of fees will fall from circa 7.0% in the 2010 financial year to circa 4.5% during the first full year of the new facilities. The new facility will start in April 2011 on the expiry of the existing facility. Associated refinancing costs of around £10 million have been capitalised and will be amortised over the life of the new facility, starting in April 2011.
Rob Templeman, Chief Executive of Debenhams, said:
"We have said throughout 2010 that this would be a year of change for Debenhams and a year when the structural shift towards own bought merchandise means that we will judge our performance on profit improvement rather than sales. With this in mind, I am very pleased with the overall performance of the business this year.
"Our profit performance has been pleasing but we believe it is correct to remain cautious about the level of consumer confidence going forward. There is, however, much to be positive about in our business, including the benefits of higher own bought sales, the acquisition of Magasin, the growing multi-channel business and the ongoing store refurbishment programme, together with the deleveraging of the business through strong cash generation and lower interest costs following refinancing. All of this will collectively enable Debenhams to make further progress during the financial year ahead."
Debenhams plc acquired Magasin du Nord, the leading department store chain in Denmark, during the first half of the current financial year. Magasin is included in Debenhams' results from 7 November 2009.
Headline profit before tax and exceptional items: after adding back amortisation on capitalised bank fees and exceptional items.
Integrating the in-store and online activities has been the focus of the multi-channel business during 2010. Our aim is to provide the flexibility for customers to shop in the most convenient way for each purchase. The multi-channel business grew strongly in the year with Debenhams Direct sales for the 52 weeks up 88.4% (excluding VAT) compared with the previous year.
Debenhams remains strongly cash generative. Net debt as at 28 August 2010 will be better than market consensus. The process of refinancing Debenhams' debt facilities was completed in July, well ahead of the scheduled date of April 2011. The new £650 million senior facility comprises a £250 million term loan and a £400 million revolving credit facility expiring in October 2013 with an option to extend to October 2014.
Following a proportion of the debt being hedged into fixed rate finance, it is anticipated that the interest cost net of fees will fall from circa 7.0% in the 2010 financial year to circa 4.5% during the first full year of the new facilities. The new facility will start in April 2011 on the expiry of the existing facility. Associated refinancing costs of around £10 million have been capitalised and will be amortised over the life of the new facility, starting in April 2011.
Rob Templeman, Chief Executive of Debenhams, said:
"We have said throughout 2010 that this would be a year of change for Debenhams and a year when the structural shift towards own bought merchandise means that we will judge our performance on profit improvement rather than sales. With this in mind, I am very pleased with the overall performance of the business this year.
"Our profit performance has been pleasing but we believe it is correct to remain cautious about the level of consumer confidence going forward. There is, however, much to be positive about in our business, including the benefits of higher own bought sales, the acquisition of Magasin, the growing multi-channel business and the ongoing store refurbishment programme, together with the deleveraging of the business through strong cash generation and lower interest costs following refinancing. All of this will collectively enable Debenhams to make further progress during the financial year ahead."
Debenhams plc acquired Magasin du Nord, the leading department store chain in Denmark, during the first half of the current financial year. Magasin is included in Debenhams' results from 7 November 2009.
Headline profit before tax and exceptional items: after adding back amortisation on capitalised bank fees and exceptional items.
Debenhams plc
Popular News
Leave your Comments
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
