TIDMDEB
RNS Number : 0206R
Debenhams plc
23 April 2009
23 April 2009
DEBENHAMS PLC
INTERIM RESULTS FOR 26 WEEKS ENDED 28 FEBRUARY 2009
Financial Highlights
* Headline profit before tax* up 10.7% at GBP104.2m (H1 2008: GBP94.1m)
* Gross transaction value for 26 weeks up 0.3%
* Gross margin for 26 weeks up 10bps
* Basic earnings per share up 22.4% to 9.3p (H1 2008: 7.6p)
* Net debt at 28 February 2009 improved by GBP66.8m since year end to GBP927.2m
* Current trading for 7 weeks to 18 April 2009: gross transaction value up 6.1%,
like-for-like sales up 1.9% (ex VAT), gross margin up
*Before non-cash debt fee write-off of GBP2.0m (H1 2008: GBP2.1m)
Operating Highlights
* Market share gains, continuing 18 month trend
* Good sales performance from own bought ranges, particularly Designers at
Debenhams
* 5 new department stores opened as planned in year-to-date (4 in the first half)
adding net 308,000 sq ft of space and creating 800 new jobs
* Contracted to open a further 9 stores in next 2 years which will create a
further 1800 jobs
* Continued strong growth in debenhams.com with sales up 29.7%
* 8 new international franchise stores opened
Rob Templeman, Chief Executive of Debenhams, said:
"The increase in profitability in the first half is a considerable achievement
given the difficult trading conditions across the retail sector and reflects our
commitment to producing stylish, quality products at exceptional value as well
as a continuing focus on the levers that drive cash margin.
"We are pleased with the performance of our own bought ranges and in particular
Designers at Debenhams where design excellence and enhanced product quality at
great value are continuing to prove popular with consumers. This has led to
further market share gains.
"There is much to look forward to in the second half particularly in relation to
the development of own bought product ranges with the expansion of some existing
brands and the launch of a number of exciting new brands throughout the store at
the end of the summer. The second half has started well with improvements in
gross transaction value, like-for-like sales and gross margin. That said, we
remain cautious about the outlook for consumer confidence for the remainder of
the year and we will continue to run the business accordingly, with an ongoing
focus on cash profit."
FINANCIAL SUMMARY
+----------------------------------------+-------------+--------------+------------+
| | H1 2009 | H1 2008 | Change |
+----------------------------------------+-------------+--------------+------------+
| Gross transaction value (GTV) | GBP1,307.2m | GBP1,303.6m | +0.3% |
+----------------------------------------+-------------+--------------+------------+
| Like-for-like sales* | | | -3.6% |
+----------------------------------------+-------------+--------------+------------+
| Operating profit | GBP134.7m | GBP127.5m | +5.7% |
+----------------------------------------+-------------+--------------+------------+
| Gross margin | | | +10bps |
+----------------------------------------+-------------+--------------+------------+
| Headline profit before tax** | GBP104.2m | GBP94.1m | +10.7% |
+----------------------------------------+-------------+--------------+------------+
| Profit before tax | GBP102.2m | GBP92.0m | +11.1% |
+----------------------------------------+-------------+--------------+------------+
| Earnings per share | 9.3p | 7.6p | +22.4% |
+----------------------------------------+-------------+--------------+------------+
| Dividend per share | Nil | 2.5p | N/A |
+----------------------------------------+-------------+--------------+------------+
| | 28-02-09 | 01-03-08 | |
+----------------------------------------+-------------+--------------+------------+
| Net debt | GBP927.2m | GBP979.3m | GBP52.1m |
+----------------------------------------+-------------+--------------+------------+
*Excluding VAT
**After adding back GBP2.0m of capitalised bank fees (H1 08 GBP2.1m); includes
GBP7.2m deduction (H108 GBP7.0m) for flat lining of lease rentals (GBP111.4m
before deduction)
Enquiries
+--------------------------------------+--------------------------------------+
| Debenhams plc | 020 7408 3302 |
| Rob Templeman, Chief Executive | 020 7408 3304 / 07908 483841 |
| Chris Woodhouse, Finance Director | |
| Lisa Williams, Investor Relations | |
| | |
+--------------------------------------+--------------------------------------+
| Financial Dynamics | 020 7269 7170 |
| Jonathon Brill | 020 7269 7157 |
| Billy Clegg | 020 7269 7227 |
| Caroline Stewart | |
+--------------------------------------+--------------------------------------+
High resolution images are available for media to view and download free of
charge from www.prshots.com/Debenhams.
REVIEW OF THE FIRST HALF
MARKET CONDITIONS
Trading conditions across the retail sector were difficult during the first half
with a high level of volatility from week to week. Consumers were undoubtedly
concerned by issues in the banking sector and economy in general in the autumn
but, despite this, trading over Christmas and the winter sale held up well.
February was impacted by severe weather across the UK. Debenhams' trading during
the half broadly followed this pattern.
FINANCIAL PERFORMANCE
Despite the difficult trading environment, Debenhams delivered a robust
financial performance in the first half.
Gross transaction value for the period grew by GBP3.6 million to GBP1,307.2
million. Like-for-like sales decreased by 3.6%, excluding VAT.
Gross margin for the 26 week period was 10 basis points higher than last year,
partly driven by stronger own bought sales mix versus concessions.
Profitability moved ahead strongly during the first half. Headline profit before
tax (which excludes non-cash debt fee write-offs) for the first half was
GBP104.2 million, compared with GBP94.1 million last year, an increase of 10.7%.
Profit before tax of GBP102.2 million was 11.1% higher than a year ago. EBITDA
for the period was 6.7% higher than last year at GBP183.4 million. The main
drivers of this resilient profit performance were the increase in gross
transaction value, the continuing tight management of costs and stocks and
management's focus on the levers that drive cash margin. It is also a testament
to the successful trading strategy executed over the important Christmas trading
period.
Basic earnings per share of 9.3 pence compared with 7.6 pence for the first half
of last year, an increase of 22.4%. The higher level of growth in earnings per
share versus profit before tax is a result of a prior year adjustment to the tax
charge increasing net profit after taxation.
Further investment was made in Debenhams' business during the half resulting in
capital expenditure of GBP51.2 million. Of this, 53% relates to the ongoing
investment in the store portfolio through the opening of new stores, four of
which opened during the first half including the flagship store at Westfield
London at the end of October.
The business was strongly cash generative in the half with cash inflow from
operating activities of GBP120.8 million. Net debt at the end of the half on 28
February 2009 was GBP927.2 million. This was an improvement of GBP52.1 million
over the position at the end of the first half last year (1 March 2008) and
GBP66.8 million better than at the end of the last financial year (30 August
2008). A GBP100 million amortisation payment is due in May 2009 under the terms
of the main bank facility. This payment will be met out of cash flow and the
funds are on deposit.
The Board continues to believe that in order to maximise value for shareholders
in the current environment it is important that leverage is taken off the agenda
whilst prudent capital investment in higher returning projects is maintained
across the business, particularly in relation to the new store programme and any
opportunistic acquisitions, similar to Principles, that may arise. The Board has
therefore decided, despite a robust trading performance, continuing market share
gains and strong cash generation in the first half, not to propose an interim
dividend.
OPERATIONAL REVIEW
Debenhams gained market share throughout the first half. In the most recently
available data for the UK (source: TNS Worldpanel Fashion 26 weeks market share
data to 1 March 2009 vs. 2008), Debenhams' total market share in clothing,
footwear and accessories increased by 10 basis points. The strongest market
share performances were delivered by Menswear (up 30 basis points) and
Childrenswear (up 20 basis points). Market share gains have now been achieved on
a regular basis for 18 months as customers have responded to the significant
improvements made to the design, quality and value of Debenhams' own bought
products, as well as an enhanced shopping experience on the back of improved
in-store presentation.
Own bought products continue to outperform concessions with the sales of own
bought ranges increasing by 4.4% whilst concessions declined by 11.8%.
Overall, own bought product sales accounted for 75.6% of total sales during the
first half, compared to 72.2% in the same period last year. The medium-term
target is 80-85%, although some new stores already carry over 90% own bought
stock. To this end, over the next 12 months some 450,000 square feet of trading
space will be converted from concession to own bought through a combination of
extending existing brands and introducing new brands.
The strongest performing categories in the business during the half were the
Designers at Debenhams ranges, where overall sales increased by 11%. Research
suggests that in the current economic climate customers are looking for the
quality, longevity and versatility that Designers at Debenhams products offer.
The investment made in product design and fashionability also continues to find
favour with customers across the store. In Womenswear key brands in the first
half included Star by Julien Macdonald and J by Jasper Conran and in Menswear
Rocha.John Rocha and Jeff Banks both performed well. J by Jasper Conran also
recorded a very strong half in Childrenswear, as did Baker by Ted Baker which
has recently seen the successful launch of Baby Baker. In Home, the penetration
of designer sales has increased significantly particularly in accessories,
bedding, bath and china. In Health and Beauty, premium brands such as Chanel,
Benefit, Mac and the newly introduced Bare Minerals were amongst the bestselling
product ranges.
Stock levels continue to be managed tightly. Overall stock in the business has
been reduced, largely as a result of the brand rationalisation work undertaken
over the last 12 months to improve the shopping experience by eliminating
duplication and creating "power brands" which customer feedback suggests are
easier to shop. Stock density on a like-for-like basis was 8.4% lower at the end
of the first half than the corresponding time last year. At the end of the half
terminal stocks were at a historically low level.
Managing the cost base has been a key management focus during the first half and
this has contributed to the increase in profitability seen during the period.
Regionally there was little variation in performance amongst Debenhams' stores
during the first half. Northern Ireland has performed strongly as shoppers in
the Republic of Ireland take advantage of the strength of the Euro. Conversely
there are signs of weakening in the Republic of Ireland in line with the severe
economic downturn being experienced in that market.
Since the end of the first half, a quantity of stock and fixtures and fittings
has been acquired from the administrators of Principles, as well as a licence to
trade the brand through that stock. This will ensure continuity of supply to
Debenhams and accords with the strategy of increasing the own bought sales mix.
We believe that this acquisition will be beneficial to the business. Given the
current shake-out on the high street, it is possible that other such
opportunities will arise in the coming months and we will seek to take advantage
of these for the benefit of Debenhams as appropriate.
Trading space and new stores
Net new space in the first half was 249,000 square feet, taking total space to
just under 11 million square feet at the end of the half. The average space
during the half increased by 4.6%.
Four new stores were opened during the first half in Livingston, Great Yarmouth,
the Westfield London flagship and Wrexham. Since the end of the half, Bury St
Edmunds has been opened taking the total portfolio to 154 stores. Returns from
new stores continue to be very attractive and all new stores opened year-to-date
are performing in line with or better than expectations.
The pipeline for new stores remains strong despite the economic environment. In
the 2010 financial year we are scheduled to open five new department stores and
two new Desire stores. In the following year we will open one new department
store and one re-sited department store.
Debenhams Direct
Debenhams Direct has continued to grow strongly. Visitors and sales were up by
39.1% and 29.7% respectively during the first half. Overall, the direct business
accounted for 2.1% of total sales during the half (H1 2008: 1.6%).
New developments introduced during the first half include: the launch of
Debenhams Outlet which brings together all promotional offers and discounts into
one place; zoom, video and catwalk/outfit projection which gives customers much
closer detail of items and more advice on outfit building; shop by size which
enables customers to save time by only viewing items for which their chosen size
is available; product reviews and surveys posted by customers; and social
networking through Facebook and Twitter.
International franchise stores
At the end of the first half, there were 49 international franchise stores in 18
countries, an increase of nine stores and three countries since the end of the
first half last year. Eight of these stores were opened during the first half of
the year including stores in Indonesia, India, Iran, Moldova, Malaysia, Romania
(2 stores) and Saudi Arabia.
The international business continues to perform well despite some signs of
softening in the retail sector in some of the markets of operation. It
represented 2.4% of total sales during the half compared with 2.1% last year.
Further new stores are planned in Dubai, Romania and Saudi Arabia in the second
half of 2009.
BOARD OF DIRECTORS
On 9 January 2009 it was announced that Richard Gillingwater intended to step
down from the Board in order to focus on his new role of Chairman of CDC Group
plc. Accordingly, Mr. Gillingwater stepped down on 16 April 2009 and the Board
would like to thank him for his valuable contribution over the last three years.
Paul Pindar has been appointed Senior Independent Director and the Remuneration
Committee will now be chaired by Adam Crozier.
RISKS AND UNCERTAINTIES
The principal risks and uncertainties for the remainder of the year are
unchanged from those detailed in the Company's Annual Report and Accounts for
2008 (see page 44 of that document). The most relevant of risks are: factors
outside Debenhams' control such as adverse economic conditions or a downturn in
the retail industry; competitive pressures in the highly competitive retail
sector; and Debenhams' ability to predict or fulfil customer demands or
preferences.
CURRENT TRADING AND OUTLOOK
Gross transaction value for the seven weeks to 18 April 2009 was 6.1% higher
than the same period last year and like-for-like sales were up by 1.9%
(excluding VAT). Gross margin for the seven weeks was also higher than the
corresponding period a year ago.
There is much to look forward to in the second half particularly in relation to
the development of own bought product ranges with the expansion of some existing
brands and the launch of a number of exciting new brands throughout the store at
the end of the summer. The second half has started well with improvements in
gross transaction value, like-for-like sales and gross margin. That said, we
remain cautious about the outlook for consumer confidence for the remainder of
the year and we will continue to run the business accordingly, with an ongoing
focus on cash profit.
Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences and
prospects are "forward-looking statements" within the meaning of the United
States federal securities laws. These forward-looking statements reflect
Debenhams' current expectations concerning future events and actual results may
differ materially from current expectations or historical results. Any such
forward-looking statements are subject to various risks and uncertainties,
including: Debenhams' ability to predict customer preferences and demands
accurately; the effectiveness of Debenhams' brand awareness and marketing
programmes; the occurrence of weak sales during peak selling seasons or extreme
or unseasonal weather conditions; difficult market conditions and fragile
consumer confidence; competitive factors in the highly competitive retail
industry; Debenhams' ability to successfully implement its new store rollout and
department store refurbishment/modernisation strategy; Debenhams' ability to
maintain its relationships with certain designers and its significant concession
partners; and currency fluctuations and currency risk.
* * *
Additional risk factors that you may want to consider are: Debenhams' ability to
retain key management and personnel; disruptions or other adverse events
affecting Debenhams' relationship with its major suppliers or its store card
provider; factors outside Debenhams' control, such as changes in the financial
or equity markets, adverse economic conditions or a downturn in the retail
industry, or damage or interruptions due to operational disruption, natural
disaster, war or terrorist activity; and work stoppages; slowdowns or strikes.
Notes to Editors
Debenhams is a leading department stores group with a strong presence in key
product categories including Womenswear, Menswear, Childrenswear, Home and
Health and Beauty. Debenhams is the second largest department store chain in the
UK.
Debenhams has a total of 144 department stores in the UK and the Republic of
Ireland and 10 Desire by Debenhams stores, which is a small store concept
featuring a mix of womenswear, accessories, lingerie, cosmetics and
childrenswear. Debenhams has 49 international franchise stores in 18 countries
and an online store, www.debenhams.com, through which much of the Debenhams
range is available.
Designers at Debenhams include Ted Baker, Jasper Conran, Erickson Beamon, Pip
Hackett, Betty Jackson, Ben de Lisi, Julien Macdonald, Melissa Odabash, Jane
Packer, Pearce Fionda, Janet Reger, John Rocha and Matthew Williamson.
Independent review report to Debenhams plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 28
February 2009, which comprises the income statement, balance sheet, statement of
recognised income and expense, cash flow statement and related notes. We have
read the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial
statements
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the 26 weeks ended 28 February 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
23 April 2009
Consolidated Income Statement
For the 26 weeks ended 28 February 2009
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | |
+---------------------------------------+----------+------+------------+-------------------------+
| | | Note | Unaudited | Unaudited | Audited |
| | | | 26 weeks | 26 weeks to | 52 weeks |
| | | | to | 1 March | to |
| | | | 28 | 2008 | 30 |
| | | | February | | August |
| | | | 2009 | | 2008 |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | GBPm | GBPm | GBPm |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Revenue | | 2 | 1,064.8 | 1,029.3 | 1,839.2 |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Cost of sales | | | (886.0) | (854.5) | (1,571.6) |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Gross profit | | | 178.8 | 174.8 | 267.6 |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Distribution costs | | | (24.9) | (26.9) | (50.0) |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Administrative expenses | | | (19.2) | (20.4) | (41.5) |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Operating profit | | | 134.7 | 127.5 | 176.1 |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Interest receivable and similar | | 5 | 0.6 | 2.6 | 4.8 |
| income | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Interest payable and similar charges | | 6 | (33.1) | (38.1) | (75.0) |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Profit before taxation | | | 102.2 | 92.0 | 105.9 |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| Taxation | | 7 | (21.0) | (26.9) | (28.8) |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
| | | | | |
+--------------------------------------------------+------+------------+-------------+-----------+
| Profit for the financial period attributable to | 13 | 81.2 | 65.1 | 77.1 |
| equity shareholders | | | | |
+--------------------------------------------------+------+------------+-------------+-----------+
| | | | | | |
+---------------------------------------+----------+------+------------+-------------+-----------+
Earnings per share attributable to the equity shareholders (expressed in pence
per share)
+-------------------------------------+-------+---+-----+---+---+---+---+----+---+-----------+
| | | | | | | |
+-------------------------------------+-------+-------------+---+-------+----+---------------+
| | | | Pence per | Pence per | Pence per |
| | | | share | share | share |
+-------------------------------------+-----------+-----+-----------+------------+-----------+
| | | | | | |
+-------------------------------------+-----------+-----+-----------+------------+-----------+
| Basic | 9 | | 9.3 | 7.6 | 9.0 |
| | | | | | |
+-------------------------------------+-----------+-----+-----------+------------+-----------+
| | | | | | |
+-------------------------------------+-----------+-----+-----------+------------+-----------+
| Diluted | 9 | | 9.3 | 7.6 | 9.0 |
| | | | | | |
+-------------------------------------+-----------+-----+-----------+------------+-----------+
| | | | | | |
+-------------------------------------+-------+---+-----+---+---+---+---+----+---+-----------+
All Group operations during the financial periods were continuing operations.
Consolidated Statement of Recognised Income & Expenses
For the 26 weeks ended 28 February 2009
+--------------------------------------------------+-------------+-----------------------------+-----+-------------+--------------+--------------+
| | | Unaudited | Unaudited | Audited |
| | | 26 weeks to | 26 weeks to | 52 weeks to |
| | | 28 February | 1 March | 30 August |
| | | | 2008 | 2008 |
| | | 2009 | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | GBPm | GBPm | GBPm |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Profit for the financial period | | 81.2 | 65.1 | 77.1 |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Actuarial (loss)/gain recognised in the pension schemes | | (41.3) | 4.2 | (79.8) |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Movement on deferred tax relating to the pension schemes | | 11.6 | (1.2) | 22.3 |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Change in the valuation of the available for sale investments | | (2.9) | (8.4) | (9.3) |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Currency translation | | (1.0) | 2.5 | 1.3 |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Cash flow hedges | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| - net fair value gains/(losses)(net of tax) | | 2.2 | (14.9) | (5.0) |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| - recycled and adjusted against the initial measurement of the acquisition cost of inventory | (11.2) | (0.4) | 0.9 |
+----------------------------------------------------------------------------------------------------+-------------+--------------+--------------+
| - reclassified and reported in net profit | 0.6 | - | (0.5) |
+----------------------------------------------------------------------------------------------------+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Net expense recognised directly in equity | | (42.0) | (18.2) | (70.1) |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------------------------------------------------------+-----+-------------+--------------+--------------+
| Total recognised income attributable to the equity shareholders of the Group | 39.2 | 46.9 | 7.0 |
+----------------------------------------------------------------------------------------------------+-------------+--------------+--------------+
| | | | | |
+--------------------------------------------------+-------------+-----------------------------+-----+-------------+--------------+--------------+
Consolidated Balance Sheet
At 28 February 2009
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | |Note | | Unaudited | Unaudited | Audited |
| | | | | 28 | 1 March | 30 |
| | | | | February | 2008 | August |
| | | | | 2009 | | 2008 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | GBPm | GBPm | GBPm |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| ASSETS | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Non-current assets | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Intangible assets | | 10 | | 838.5 | 841.6 | 840.8 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Property, plant and equipment | | 10 | | 677.4 | 680.9 | 693.3 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Financial assets | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Available-for-sale investments | | | | 8.1 | 11.9 | 11.0 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Derivative financial instruments | | | | 2.9 | 0.8 | 8.2 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Retirement benefit assets | | 11 | | - | 100.6 | 25.0 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Deferred tax assets | | | | 56.7 | 55.2 | 57.4 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | 1,583.6 | 1,691.0 | 1,635.7 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Current assets | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Inventories | | | | 249.9 | 249.0 | 237.5 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Trade and other receivables | | | | 58.6 | 50.7 | 58.5 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Derivative financial instruments | | | | 40.0 | 2.4 | 10.5 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Cash and cash equivalents | | | | 139.3 | 139.2 | 42.1 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | 487.8 | 441.3 | 348.6 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| LIABILITIES | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Current liabilities | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Financial liabilities | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Bank overdraft and borrowings | | | | (173.5) | (126.0) | (144.5) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Derivative financial instruments | | | | (0.9) | (0.8) | - |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Trade and other payables | | | | (415.5) | (471.6) | (470.2) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Current tax liabilities | | | | (41.7) | (42.7) | (29.9) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Provisions for liabilities and | | | | (0.6) | (0.7) | (0.7) |
| charges | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | (632.2) | (641.8) | (645.3) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Net current liabilities | | | | (144.4) | (200.5) | (296.7) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Non-current liabilities | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Financial liabilities | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Bank overdraft and borrowings | | | | (893.0) | (992.5) | (891.6) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| - Derivative financial instruments | | | | (28.3) | (2.1) | (0.7) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Deferred tax liabilities | | | | (77.9) | (111.7) | (95.3) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Other non-current liabilities | | | | (268.5) | (207.8) | (225.8) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Provisions for liabilities and | | | | (0.2) | (0.4) | (0.3) |
| charges | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Retirement benefit obligations | | 11 | | (8.7) | - | - |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | (1,276.6) | (1,314.5) | (1,213.7) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| NET ASSETS | | | | 162.6 | 176.0 | 125.3 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| SHAREHOLDERS' EQUITY | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Share capital | | 12 | | 0.1 | 0.1 | 0.1 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Share premium | | | | 682.9 | 682.9 | 682.9 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Merger reserve | | | | 1,200.9 | 1,200.9 | 1,200.9 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Reverse acquisition reserve | | | | (1,199.9) | (1,199.9) | (1,199.9) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Hedging reserve | | | | 2.4 | 0.1 | 10.8 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Other reserves | | | | 1.1 | 4.7 | 5.1 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| Retained earnings | | | | (524.9) | (512.8) | (574.6) |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| TOTAL EQUITY | | 13 | | 162.6 | 176.0 | 125.3 |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
| | | | | | | |
+---------------------------------------+---+------+--+--------------------+--------------------+------------------+
Consolidated Cash Flow Statement
For the 26 weeks ended 28 February 2009
+---------------------------------------+-+-+-+----+------+-----------+-----------+----------+
| | |Note | Unaudited | Unaudited | Audited |
| | | | 26 weeks | 26 weeks | 52 weeks |
| | | | to | to | to |
| | | | 28 | 1 March | 30 |
| | | | February | 2008 | August |
| | | | 2009 | | 2008 |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | GBPm | GBPm | GBPm |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Cash flows from operating activities | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Cash generated from operations | | 14 | 160.4 | 180.9 | 285.8 |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Interest received | | | 0.6 | 2.6 | 4.8 |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Interest paid | | | (29.3) | (33.8) | (71.6) |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Tax paid | | | (10.9) | (13.7) | (27.6) |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Net cash generated from | | | 120.8 | 136.0 | 191.4 |
| operating activities | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Purchase of property, plant | | | (50.4) | (69.8) | (124.9) |
| and equipment | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Purchase of intangible assets | | | (0.8) | (2.1) | (4.2) |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| Proceeds from sale of | | | - | 3.5 | 3.5 |
| property, plant and equipment | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | | |
+-----------------------------------------+--------+------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| Net cash used in investing activities | | (51.2) | (68.4) | (125.6) |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Repayment of term loan facility | | | - | - | (100.0) |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Dividends paid | | | (2.4) | (32.6) | (44.4) |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Purchase of shares by Debenhams | | | - | (1.1) | (1.1) |
| Retail Employee Trust 2004 | | | | | |
| ("DRET") | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Payments for reduction in | | | (0.1) | (0.7) | (0.7) |
| outstanding finance lease | | | | | |
| liability | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Capitalised debt issue costs | | | - | (1.7) | (1.8) |
+---------------------------------------------+----+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Net cash used in financing | | | (2.5) | (36.1) | (148.0) |
| activities | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------------+----+------+-----------+-----------+----------+
| Net increase/(decrease) in cash and cash | | 67.1 | 31.5 | (82.2) |
| equivalents | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------+----------+------+-----------+-----------+----------+
| Cash and cash equivalents at beginning of | | (2.9) | 79.3 | 79.3 |
| financial period | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | | | | |
+-------------------------------------------+------+------+-----------+-----------+----------+
| | | | | | |
+-------------------------------------------+------+------+-----------+-----------+----------+
| Cash and cash equivalents at end of | | 15 | 64.2 | 110.8 | (2.9) |
| financial period | | | | | |
+-------------------------------------------+------+------+-----------+-----------+----------+
| | | | | | |
+---------------------------------------+-+-+-+----+------+-----------+-----------+----------+
1. Basis of preparation
This Interim Report has been prepared in accordance with the Disclosure and
Transparency Rules of the UK Financial Services Authority, International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) as adopted by the European Union (EU). The
accounting policies applied are consistent with those described in the Annual
Report and Financial Statements 2008. The Interim Report has been prepared in
accordance with IAS 34 'Interim Financial Reporting' and should be read in
conjunction with the Annual Report and Financial Statements 2008.
The Group's interim condensed consolidated financial information is not audited
and does not constitute statutory financial statements as defined in Section 240
of the Companies Act 1985. Comparative figures for the 52 weeks ended 30 August
2008 have been extracted from the Group's 2008 Annual Report and Financial
Statements, on which the auditors gave an unqualified opinion and did not
include a statement under Section 237(2) or (3) of the Companies Act 1985. The
full financial statements for those 52 weeks have been filed with the Registrar
of Companies.
The following new standards and interpretations have been issued but are not
effective for the 52 weeks ending on 29 August 2009 and have not been adopted
early.
+---------+--------------------------------------------------------+----------------+
| | |
| International Accounting Standards (IFRS/IAS) | Effective date |
+------------------------------------------------------------------+----------------+
| IFRS 8 | Operating Segments | 1 January 2009 |
+---------+--------------------------------------------------------+----------------+
| | | |
+---------+--------------------------------------------------------+----------------+
| IFRIC Interpretations |
+-----------------------------------------------------------------------------------+
| IFRIC | Customer Loyalty Programmes | 1 September |
| 13 | | 2009 |
+---------+--------------------------------------------------------+----------------+
| | | |
+---------+--------------------------------------------------------+----------------+
2. Turnover
The Group has one class of business, retailing, and all material operations are
in the British Isles.
3. Gross transaction value
Revenue from concessions is required to be shown on a net basis, being the
commission received rather than the gross value achieved by the concessionaire
on the sale. Management believes that gross transaction value, which presents
revenue on a gross basis before adjusting for concessions, staff discounts and
the cost of loyalty scheme points, represents a better guide to the value of the
overall activity of the Group.
+----------------------------------+-------+-----------+-----------+-----------+----------+
| | | | 26 weeks | 26 weeks | 52 weeks |
| | | | to | to | to |
| | | | 28 | 1 March | 30 |
| | | | February | 2008 | August |
| | | | 2009 | | 2008 |
+----------------------------------+-------+-----------+-----------+-----------+----------+
| | | | GBPm | GBPm | GBPm |
+----------------------------------+-------+-----------+-----------+-----------+----------+
| | | | | | |
+----------------------------------+-------+-----------+-----------+-----------+----------+
| Gross transaction value | | | 1,307.2 | 1,303.6 | 2,336.0 |
+----------------------------------+-------+-----------+-----------+-----------+----------+
| | | | | | |
+----------------------------------+-------+-----------+-----------+-----------+----------+
4. Segmental Information
Based on an analysis of risks and returns, the directors consider that the Group
has only one identifiable business segment, retailing. All material operations
of the Group are carried out in the British Isles and, therefore, no
geographical segmentation is disclosed. The Group operates both an internet and
an international division, both of which remain immaterial for the purposes of
segmental reporting.
Consequently, the Group has considered business segmentation as the primary
segmentation, with a single separately reportable segment, retailing.
5. Interest receivable and similar income
+------------------------------------------+------------+----------+-----+----+----+----+
| | | 26 weeks | 26 weeks | 52 |
| | | to | to | weeks |
| | | 28 | 1 March | to |
| | | February | 2008 | 30 |
| | | 2009 | | August |
| | | | | 2008 |
+------------------------------------------+------------+----------+----------+---------+
| | | GBPm | GBPm | GBPm |
+------------------------------------------+------------+----------+----------+---------+
| | | | | |
+------------------------------------------+------------+----------+----------+---------+
| Interest on bank deposits | | 0.6 | 2.6 | 4.8 |
+------------------------------------------+------------+----------+----------+---------+
| | | | | |
+------------------------------------------+------------+----------+----------+---------+
| | | | | |
+------------------------------------------+------------+----------+-----+----+----+----+
6. Interest payable and similar charges
+------------------------------------------+------------+----------+----------+----------+
| | | 26 weeks | 26 weeks | 52 weeks |
| | | to | to | to |
| | | 28 | 1 March | 30 |
| | | February | 2008 | August |
| | | 2009 | GBPm | 2008 |
| | | GBPm | | GBPm |
+------------------------------------------+------------+ + + +
| | | | | |
+------------------------------------------+------------+ + + +
| | | | | |
+------------------------------------------+------------+----------+----------+----------+
| | | | | |
+------------------------------------------+------------+----------+----------+----------+
| Interest payable and similar charges | | | | |
+------------------------------------------+------------+----------+----------+----------+
| Bank loans and overdrafts | | (29.3) | (34.6) | (67.1) |
+------------------------------------------+------------+----------+----------+----------+
| Amortisation of issue costs on loans | | (2.0) | (2.1) | (4.2) |
+------------------------------------------+------------+----------+----------+----------+
| Interest payable on finance leases | | (1.8) | (1.4) | (3.0) |
+------------------------------------------+------------+----------+----------+----------+
| Charges arising from ineffective cash | | - | - | (0.7) |
| flow hedges | | | | |
+------------------------------------------+------------+----------+----------+----------+
| | | | | |
+------------------------------------------+------------+----------+----------+----------+
| Interest payable and similar charges | | (33.1) | (38.1) | (75.0) |
+------------------------------------------+------------+----------+----------+----------+
| | | | | |
+------------------------------------------+------------+----------+----------+----------+
7. Taxation
The taxation charge for the 26 weeks ended 28 February 2009 is based on an
estimated effective tax rate for the full year of 19.9% (52 weeks ended 30
August 2008: 27.2%). This is lower than the standard rate of corporation tax
(28%) due to a prior year adjustment.
8. Dividends
The Company paid a final dividend in respect of the 52 weeks ended 30 August
2008 of 0.5 pence per share on 16 January 2009. The directors are not proposing
an interim dividend in respect of the 26 weeks ended 28 February 2009 (26 weeks
to 1 March 2008: interim dividend of 2.5 pence which absorbed GBP21.5 million of
shareholders' funds).
9. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Group has one class of dilutive potential ordinary shares, those
share options granted to employees where the exercise price is less than the
market price of the Company's ordinary shares during the period.
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| Basic and diluted earnings per | 26 weeks to | 26 weeks to | 52 weeks to |
| share | 28 February | 1 March | 30 August |
| | 2009 | 2008 | 2008 |
+-----------------------------------+------------------+-------------------+------------------+
| | | Basic | Diluted | Basic | Diluted | Basic | Diluted |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| Profit for the financial period | 81.2 | 81.2 | 65.1 | 65.1 | 77.1 | 77.1 |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | | |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| | | | | | | | |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| | Number | Number | Number | Number | Number | Number |
| | m | m | m | m | m | m |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| Weighted average number of shares | 876.7 | 876.7 | 859.0 | 859.0 | 861.5 | 861.5 |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| Shares held by ESOP | | (1.4) | (1.4) | (0.7) | (0.7) | (1.1) | (1.1) |
| (weighted) | | | | | | | |
| | | | | | | | |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
| Shares issuable (weighted) | - | - | - | - | - | - |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| Adjusted weighted average | 875.3 | 875.3 | 858.3 | 858.3 | 860.4 | 860.4 |
| number of shares | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | Pence | Pence | Pence | Pence | Pence | Pence |
| | per | per | per | per | per | per |
| | share | share | share | share | share | share |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| Earnings per share | 9.3 | 9.3 | 7.6 | 7.6 | 9.0 | 9.0 |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | |
+-----------------------------------+--------+---------+---------+---------+--------+---------+
| | | | | | | | |
+-------------------------+---------+--------+---------+---------+---------+--------+---------+
10. Tangible and intangible assets and commitments
+----------------------------------+----------+----------+------------+----------+----------+
| | | | Tangible and intangible |
| | | | assets |
+----------------------------------+----------+----------+----------------------------------+
| | | | 28 | 1 March | 30 |
| | | | February | 2008 | August |
| | | | 2009 | | 2008 |
+----------------------------------+----------+----------+------------+----------+----------+
| | | | GBPm | GBPm | GBPm |
+----------------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| Opening net book amount | | | 1,534.1 | 1,510.6 | 1,510.6 |
+----------------------------------+----------+----------+------------+----------+----------+
| Additions | | | 26.3 | 61.0 | 118.1 |
+----------------------------------+----------+----------+------------+----------+----------+
| Foreign currency | | | 4.2 | 3.8 | 6.6 |
| revaluation | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| Disposals | | | (0.1) | (5.0) | (5.4) |
+----------------------------------+----------+----------+------------+----------+----------+
| Depreciation and | | | (48.0) | (47.0) | (95.0) |
| amortisation | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| Accelerated | | | (0.6) | (0.9) | (0.8) |
| depreciation | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
| Closing net book amount | | | 1,515.9 | 1,522.5 | 1,534.1 |
+----------------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------------+----------+----------+------------+----------+----------+
Capital commitments contracted but not provided for by the Group amounted to
GBP1.8 million (30 August 2008: GBP11.7 million; 1 March 2008: GBP14.1 million).
11. Defined benefit pension plans
The Group operates defined benefit type pension schemes, being the Debenhams
Executive Pension Plan and the Debenhams Retirement Scheme, the assets of which
are held in separate trustee-administered funds.
Both pension schemes were closed for future service accrual from 31 October
2006. The closure to future accrual will not affect the pensions of those who
have retired or the deferred benefits of those who have left service or opted
out before 31 October 2006. Future pension arrangements are provided through a
money purchase stakeholder plan or a defined contribution scheme for the
employees in the Republic of Ireland.
Actuarial valuations of the Group's pension schemes using the projected unit
basis were carried out at 31 March 2005 and updated as at each relevant
period-end for the purposes of IAS 19 'Employee benefits' by Watson Wyatt
Limited, a qualified independent actuary. The 31 March 2008 actuarial valuation
is in progress and relevant data obtained by the actuary from this valuation has
been used when calculating the IAS 19 'Employee benefits' valuation at 28
February 2009 and 30 August 2008.
The major assumptions used by the actuary are given below. The mortality
assumptions remain consistent with those disclosed in the Group's 2008 Annual
Report and Financial Statements.
+----------------------+--------------+---------------+------------+----------+----------+
| | | | 28 | 1 March | 30 |
| | | | February | 2008 | August |
| | | | 2009 | | 2008 |
+----------------------+--------------+---------------+------------+----------+----------+
| | | | % pa | % pa | % pa |
+----------------------+--------------+---------------+------------+----------+----------+
| | | | | | |
+----------------------+--------------+---------------+------------+----------+----------+
| Discount rate | | 6.90 | 6.70 | 6.35 |
+-------------------------------------+---------------+------------+----------+----------+
| Price inflation | | 3.20 | 3.40 | 3.80 |
+-------------------------------------+---------------+------------+----------+----------+
| Rate of increase in salaries | | 3.20 | 4.30 | 3.80 |
+-------------------------------------+---------------+------------+----------+----------+
| Rate of increase in pension | | 3.20 | 3.40 | 3.80 |
| payments | | | | |
+-------------------------------------+---------------+------------+----------+----------+
| Rate of increase for deferred | | 3.20 | 3.40 | 3.80 |
| pensioners | | | | |
+-------------------------------------+---------------+------------+----------+----------+
| | | | | |
+----------------------+--------------+---------------+------------+----------+----------+
The movement in the pension asset is as follows:
+----------------------+--------------+---------------+------------+----------+----------+
| | | | 28 | 1 March | 30 |
| | | | February | 2008 | August |
| | | | 2009 | | 2008 |
+----------------------+--------------+---------------+------------+----------+----------+
| | | | GBPm | GBPm | GBPm |
+----------------------+--------------+---------------+------------+----------+----------+
| | | | | | |
+----------------------+--------------+---------------+------------+----------+----------+
| Surplus at the start of the period | | 25.0 | 87.3 | 87.3 |
+-------------------------------------+---------------+------------+----------+----------+
| | | | | |
+-------------------------------------+---------------+------------+----------+----------+
| Contributions | | 3.6 | 4.4 | 8.1 |
+-------------------------------------+---------------+------------+----------+----------+
| Interest credit | | 4.0 | 4.7 | 9.4 |
+-------------------------------------+---------------+------------+----------+----------+
| Net actuarial (losses)/gains on change of | (41.3) | 4.2 | (79.8) |
| assumptions | | | |
+-----------------------------------------------------+------------+----------+----------+
| | | | | | |
+----------------------+--------------+---------------+------------+----------+----------+
| | | | | |
+-------------------------------------+---------------+------------+----------+----------+
| (Deficit)/surplus at the end of the | | (8.7) | 100.6 | 25.0 |
| period | | | | |
+-------------------------------------+---------------+------------+----------+----------+
| | | | | | |
+----------------------+--------------+---------------+------------+----------+----------+
12. Share capital
+----------------------------------------------+------+--+--+------------+---------------+
| | | |
+----------------------------------------------+------------+----------------------------+
| | | | GBP | Number |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| Authorised - At 28 February 2009, 30 August 2008 | | | | |
| and 1 March 2008 | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| Ordinary shares of GBP0.0001 each | | | 128,846 | 1,288,461,539 |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| | | |
+-----------------------------------------------------+-----+----------------------------+
| | | | GBP | Number |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| Issued and fully paid - Ordinary shares of | | | | |
| GBP0.0001 each | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| At 1 September 2007 and 1 March 2008 | | | 85,897 | 858,974,359 |
+-----------------------------------------------------+--+--+------------+---------------+
| Shares issued in lieu of dividends | | | 1,580 | 15,795,966 |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| At 30 August 2008 | | | 87,477 | 874,770,325 |
+-----------------------------------------------------+--+--+------------+---------------+
| Shares issued in lieu of dividends | | | 805 | 8,054,691 |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+-----------------------------------------------------+--+--+------------+---------------+
| At 28 February 2009 | | | 88,282 | 882,825,016 |
+-----------------------------------------------------+--+--+------------+---------------+
| | | | | |
+----------------------------------------------+------+--+--+------------+---------------+
13. Consolidated statement of changes in shareholders' equity
+------------------------------------------------------+----------+----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
| | to | to | to |
| | 28 | 1 March | 30 |
| | February | 2008 | August |
| | 2009 | GBPm | 2008 |
| | GBPm | | GBPm |
+------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------------------+----------+----------+----------+
| Opening shareholders' equity | 125.3 | 163.0 | 163.0 |
+------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------------------+----------+----------+----------+
| Profit for the financial period | 81.2 | 65.1 | 77.1 |
+------------------------------------------------------+----------+----------+----------+
| Currency translation differences | (1.0) | 2.5 | 1.3 |
+------------------------------------------------------+----------+----------+----------+
| Actuarial (loss)/gain recognised in the pension | (41.3) | 4.2 | (79.8) |
| schemes | | | |
+------------------------------------------------------+----------+----------+----------+
| Movement in deferred tax relating to the pension | 11.6 | (1.2) | 22.3 |
| schemes | | | |
+------------------------------------------------------+----------+----------+----------+
| Change in valuation of available-for-sale | (2.9) | (8.4) | (9.3) |
| investments | | | |
+------------------------------------------------------+----------+----------+----------+
| Cash flow hedges | (8.4) | (15.3) | (4.6) |
+------------------------------------------------------+----------+----------+----------+
| Employee share ownership plans | 0.5 | (0.2) | 0.8 |
+------------------------------------------------------+----------+----------+----------+
| Purchase of treasury shares for DRET | - | (1.1) | (1.1) |
+------------------------------------------------------+----------+----------+----------+
| Dividends paid | (4.3) | (32.6) | (54.1) |
+------------------------------------------------------+----------+----------+----------+
| Shares issued in lieu of dividend | 1.9 | - | 9.7 |
+------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------------------+----------+----------+----------+
| Closing shareholders' equity | 162.6 | 176.0 | 125.3 |
+------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------------------+----------+----------+----------+
14. Cash generated from operations
+------------------------------------------+------------+----------+----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
| | to | to | to |
| | 28 | 1 March | 30 |
| | February | 2008 | August |
| | 2009 | GBPm | 2008 |
| | GBPm | | GBPm |
+-------------------------------------------------------+----------+----------+----------+
| | | | | |
+------------------------------------------+------------+----------+----------+----------+
| Profit for the financial period | | 81.2 | 65.1 | 77.1 |
+------------------------------------------+ +----------+----------+----------+
| Taxation | | 21.0 | 26.9 | 28.8 |
+------------------------------------------+ +------------+----------+----------+
| Depreciation and amortisation (note | | 48.0 | 47.0 | 95.0 |
| 10) | | | | |
+------------------------------------------+ +------------+----------+----------+
| Accelerated depreciation (note 10) | | 0.6 | 0.9 | 0.8 |
+------------------------------------------+------------+------------+----------+----------+
| Loss/(profit) on disposal of property, plant and | 0.1 | (3.5) | (3.1) |
| equipment | | | |
+-------------------------------------------------------+----------+----------+----------+
| Employee options granted during the year | 0.5 | (0.2) | 0.8 |
+-------------------------------------------------------+----------+----------+----------+
| Fair value (gains)/losses on derivative instruments | (7.8) | 0.1 | (3.7) |
+-------------------------------------------------------+----------+----------+----------+
| Net movements in provisions for liabilities and | (0.2) | (1.7) | (1.8) |
| charges | | | |
+-------------------------------------------------------+----------+----------+----------+
| Interest income (note 5) | (0.6) | (2.6) | (4.8) |
+-------------------------------------------------------+----------+----------+----------+
| Interest expense (note 6) | 33.1 | 38.1 | 75.0 |
+-------------------------------------------------------+----------+----------+----------+
| Difference between pension charge and contributions | (7.6) | (9.1) | (17.5) |
| paid | | | |
+-------------------------------------------------------+----------+----------+----------+
| Net movement in other non-current liabilities | 42.7 | 0.7 | 18.8 |
+-------------------------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------------------------+----------+----------+----------+
| Changes in working capital | | | |
+-------------------------------------------------------+----------+----------+----------+
| (Increase)/decrease in inventories | (12.4) | (4.4) | 7.1 |
+-------------------------------------------------------+----------+----------+----------+
| (Increase)/decrease in trade and other receivables | (1.8) | 13.0 | 8.0 |
+-------------------------------------------------------+----------+----------+----------+
| (Decrease)/increase in trade and other payables | (36.4) | 10.6 | 5.3 |
+-------------------------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------------------------+----------+----------+----------+
| Cash generated from operations | 160.4 | 180.9 | 285.8 |
+-------------------------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------------+------------+----------+----------+----------+
15. Analysis of changes in net debt
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | At | Cash | Non cash | At |
| | | 30 | flow | movements | 28 |
| | | August | | | February |
| | | 2008 | | | 2009 |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | GBPm | GBPm | GBPm | GBPm |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Analysis of net debt | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Cash | | 42.1 | 97.2 | - | 139.3 |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Bank overdrafts | | (45.0) | (30.1) | - | (75.1) |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Cash and cash equivalents | | (2.9) | 67.1 | - | 64.2 |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Debt due within one year | | (96.2) | - | (0.1) | (96.3) |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Debt due after one year | | (844.3) | - | (1.8) | (846.1) |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Finance lease obligations due within | | (3.3) | 0.1 | 1.1 | (2.1) |
| one year | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| Finance lease obligations due after one | | (47.3) | - | 0.4 | (46.9) |
| year | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | (994.0) | 67.2 | (0.4) | (927.2) |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
| | | | | | |
+-----------------------------------------+----+----------+----------+-----------+----------+
16. Related parties
There have been no significant related party transactions during the period.
17. Financial information
Copies of the statutory accounts are available from the Company's registrars,
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
(Tel: 0871 384 2766), and at the Company's registered office, 1 Welbeck Street,
London, W1G 0AA.
Statement of Directors' Responsibilities
The directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union and that the
interim management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The directors of Debenhams plc are listed on pages 42 and 43 in the Group's 2008
Annual Report and Financial Statements. As disclosed on pages 42 and 43, Angela
Spindler left the Company on 30 November 2008. In addition Richard Gillingwater
stepped down from the Board on 16 April 2009.
A list of current directors is maintained on the Investors section of the
Debenhams website at www.debenhamsplc.com.
By order of the board
Paul Eardley
Company Secretary
23 April 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUPGCUPBGRP
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