€139m profits at Debenhams exceeds market expectations

DEBENHAMS suffered a £10.1 million (€11.5m) first half hit from the restructuring of its Irish operations, but still saw its half-year profits exceed market expectations.

The British department store operator, which has 10 stores in the Republic, reported a profit of £123.6m (€139.78m) before tax and exceptional items for the six-month period up to the end of February.

This figure was up by 18.6%, on a year-on-year basis. Like-for-like sales were up by just 0.3%, hampered by poor weather conditions in the early part of this year across both Britain and Ireland. However, the company has consistently seen sales growth over the course of the economic downturn and expressed its satisfaction with the results.

“We made further progress in delivering our strategy in the first half and are pleased with our performance,” said group chief executive Rob Templeman.

Mr Templeman added that management expects the trading environment for the company to be “broadly neutral” during the second half of the financial year.

Back in January, Debenhams, which entered the Irish market by acquiring Roches Stores in 2006, moved to cut around 170 jobs in its Irish division through a voluntary redundancy scheme. It is understood that the programme has been completed.

A spokesperson for the company said the restructuring of the Irish business was aimed at ensuring the business “has the flexible and right-sized workforce it needs for the future.” They added that the fact that no stores had been closed reaffirms Debenhams’ commitment to the Irish market.

Debenhams employed around 2,400 people in Ireland ahead of the restructuring move.

Meanwhile, the company’s first half results showed earnings per share fell from 8.3p to 6.5p on a year-on-year basis but net debt levels were further reduced by nearly £100m,to £415.7m, during the period.