Debenhams Regulatory News (DEB)

RNS Number : 0727K

Debenhams plc

13 April 2010

 

 

13 April 2010

 

DEBENHAMS PLC

HALF YEAR RESULTS FOR 26 WEEKS ENDED 27 FEBRUARY 2010

 

Financial Highlights

 

·; Gross transaction value up 8.4%

·; Like-for-like sales up 0.3%

·; Gross margin up 70bps

·; Headline profit before tax and exceptionals* ahead of market expectations at £123.6m, up 18.6%

·; Adjusted earnings per share 6.5p (H1 2009: 8.3p)**

·; Net debt at 27 February 2010 £511.5m, down £415.7m from a year ago

·; Current trading for 31 weeks to 3 April 2010: gross transaction value up 8.6%, like-for-like sales up 0.3%, continued strong gross margin performance

 

*After adding back amortisation on capitalised bank fees of £3.1m (H1 2009: £2.0m) and exceptional items of £6.0m (H1 2009: £nil)

**After adding back exceptional costs (net of tax) of £4.1m (H1 2009: £nil) and an adjustment in respect of the prior periods for the H1 2009 taxation charge (£8.4m)

 

 

Operating Highlights

 

·; Good sales performance from own bought ranges, particularly Designers at Debenhams

·; Further progress in market share, especially childrenswear, menswear and home*

·; Exclusive Designers at Debenhams portfolio extended through launch of new brands Principles by Ben de Lisi and H! by Henry Holland

·; 4 new stores opened, creating over 400 new jobs

·; Acquisition of Denmark's leading department store chain Magasin du Nord

·; Continued strong growth in multi-channel business; sales up 85.9%

·; 7 new international franchise stores opened year-to-date

 

*Sources: clothing Kantar Worldpanel Fashion 24 weeks market share data to 28 February 2010 vs. 2009; home GfK 52 weeks to December 2009.

 

 

Rob Templeman, Chief Executive of Debenhams, said:

 

"Throughout the last 18 months of recession, Debenhams has consistently achieved growth in sales, margins and trading profits. We made further progress in delivering our strategy in the first half and are pleased with our performance.

 

"Looking forward, we expect the trading environment to be broadly neutral for Debenhams in the second half. We will maintain our focus on driving the business forward through self help measures to achieve our strategic goals and build on the good performance of the first half. We believe that the work we have done to improve our own bought ranges, including Designers at Debenhams, both in terms of product design, quality and value and increasing the own bought mix, will continue to find favour with customers and provide a solid platform for margin expansion and market share growth."

 

 

 

FINANCIAL SUMMARY

 

Note: all numbers include Magasin du Nord unless otherwise stated.

 

	H1 2010	H1 2009	Change
Gross transaction value (GTV) - including Magasin	£1,417.2m	£1,307.2m	+8.4%
Gross transaction value (GTV) - excluding Magasin	£1,329.0m	£1,307.2m	+1.7%
Statutory revenue	£1,187.8m	£1,064.8m	+11.6%
Like-for-like sales			+0.3%
Gross margin(a) - including Magasin			+70bps
Gross margin(a) - excluding Magasin			+140bps
Operating profit before exceptionals	£146.6m	£134.7m	+8.8%
Headline profit before tax and exceptionals(b)	£123.6m	£104.2m	+18.6%
Profit before tax and exceptionals	£120.5m	£102.2m	+17.9%
Net exceptional costs before tax	£6.0m	-	-
Basic earnings per share(c)	6.2p	9.3p	-3.1p
Adjusted earnings per share (c) (d)	6.5p	8.3p	-1.8p
Dividend per share	Nil	Nil	N/A
	27-02-10	28-02-09
Net debt	£511.5m	£927.2m	£415.7m

(a) Gross margin: gross transaction value less cost of goods sold, as a percentage of gross transaction value

(b) After adding back £3.1m of amortisation on capitalised bank fees (H1 2009: £2.0m)

(c) Reflects the issue of 404.0m new shares in the June 2009 capital raising

(d) After adding back exceptional costs (net of tax) of £4.1m (H1 2009: £nil) and an adjustment in respect of the prior periods for the H1 2009 taxation charge (£8.4m)

 

 

 

Enquiries

 

Debenhams plc

Rob Templeman, Chief Executive

Chris Woodhouse, Finance Director

Lisa Williams, Investor Relations 020 7408 3304 / 07908 483841

 

Financial Dynamics

Jonathon Brill 020 7269 7170

Billy Clegg 020 7269 7157

Caroline Stewart 020 7269 7227

 

 

High resolution images are available for media to view and download free of charge from www.prshots.com/Debenhams.

 

 

A presentation will be held for analysts and investors today at 9:00am at the Ground Floor Auditorium, Bank of America Merrill Lynch, 2 King Edward Street, London EC1A 1HQ.

 

REVIEW OF THE FIRST HALF

 

 

MARKET CONDITIONS

 

Trading conditions across the retail sector were broadly stable during the first half as consumers' concerns over unemployment and government finances were countered by low interest rates and higher disposable income. The Christmas trading period held up reasonably well in November and December. Sales were impacted by poor weather across the UK and the Republic of Ireland in early January but recovered in the final weeks of the half.

 

FINANCIAL PERFORMANCE

 

Debenhams recorded a good financial performance in the first half, delivering increases in sales, margins, trading profits and market share.

 

Gross transaction value for the period grew by 8.4% to £1,417.2 million. Excluding the impact of the acquisition of Magasin du Nord, gross transaction value increased by 1.7%.

 

Like-for-like sales grew by 0.3% in the first half. A significant strand of Debenhams' strategy is to increase sales of own bought products, whereby higher own bought margins more than offset lower own bought sales densities. In the fourth quarter of last year extensive in-store space moves were undertaken to create space for both new and expanded own bought brands by reducing concession space. The detrimental impact on like-for-like sales resulting from these moves is estimated to be some 1.5% throughout the current financial year.

 

Gross margin for the 26 week period was 70 basis points higher than last year. This includes the impact of the Magasin business which has a lower gross margin due to its higher mix of concession sales. Excluding Magasin, gross margin increased by 140 basis points in the half versus last year. The gross margin gain was driven by stronger own bought sales versus concessions, careful stock control and lower cost prices, offset by the adverse movement of sterling versus the US dollar. Looking forward, gross margin guidance for the year is flat including Magasin which equates to an increase of some 80 basis points excluding Magasin (previous guidance for the latter was an increase of 50-60 basis points).

 

Profitability moved ahead strongly during the first half. EBITDA before exceptional items for the period was 5.9% higher than last year at £194.2 million. Headline profit before tax and exceptional items (which adds back amortisation on capitalised debt fees of £3.1 million and excludes exceptional items of £6.0 million) for the first half was £123.6 million, compared with £104.2 million last year, an increase of 18.6% and ahead of market expectations. Profit before tax and exceptional items was 17.9% higher than a year ago at £120.5 million.

 

Net exceptional costs (before tax) of £6.0 million were recorded in the first half. These are detailed in Note 4 to the financial statements. The largest component was an exceptional cost of £10.1 million arising out of the restructuring of the business in the Republic of Ireland which will ensure the business has the flexible and right-sized workforce it needs for the future.

 

 

Basic earnings per share of 6.2 pence compared with 9.3 pence for the first half of last year. Adjusted earnings per share (before exceptionals and a tax charge adjustment in respect of prior periods) of 6.5 pence per share compared with 8.3 pence last year. Earnings per share calculations have been impacted by the 404.0 million of additional shares in issue following the capital raising which took place in June 2009.

 

Further investment was made in Debenhams' business during the half resulting in capital investment of £49.4 million, of which £10.1 million related to the acquisition of Magasin. The acquisition of Magasin and the acceleration of the store refit programme in the second half of 2010 have resulted in an increase in the capital expenditure guidance for the full year to c.£115 million.

 

The business was strongly cash generative in the half with cash inflow from operating activities of £154.4 million (H1 2009: £120.8 million). Net debt at the end of the half on 27 February 2010 was £511.5 million. This was an improvement of £415.7 million over the position at the end of the first half last year (28 February 2009) and £78.8 million better than at the end of the last financial year (29 August 2009).

 

The board is not proposing to pay an interim dividend.

 

 

STRATEGY UPDATE AND OPERATIONAL REVIEW

 

Debenhams has continued to deliver on the strategy set out 18 months ago by focusing on measures to expand margins and gain market share whilst continuing to invest in the future development of the business. This involves four key areas of focus: product strategy, space expansion, multi-channel development and balance sheet management.

 

Product Strategy

 

Debenhams' product strategy is centred around a unique mix of exclusive and third party brands. In particular, the focus is on providing choice and differentiation through the development of own bought product ranges, including Designers at Debenhams.

 

Debenhams made further progress in market share in the first half despite the impact in some categories of lower own bought sales densities. In the most recently available data for the UK (source: Kantar Worldpanel Fashion 24 weeks market share data to 28 February 2010 vs. 2009), Debenhams' total market share in clothing, footwear and accessories remained stable. The strongest market share performances were delivered by menswear (up 20 basis points) and childrenswear (up 40 basis points). Womenswear market share has been impacted by the move into lower sales density own bought ranges and the ongoing underperformance of some of the remaining concessions. The performance of own bought womenswear was in line with management expectations during the half. Debenhams' share of the home market in the UK has also increased (source: GfK 52 weeks ended December 2009).

 

Own bought products continued to outperform concessions in the first half of the year. Designers at Debenhams was again the strongest performing category with sales of £282.1 million, up 17.7% in the first half compared with the prior year. Overall, own bought sales increased by 9.4% over the previous year whilst concessions declined by 22.5% (all numbers exclude Magasin and VAT).

 

Further progress was made during the first half to increase the own bought sales mix, which is a key part of Debenhams' product strategy. For the core business, excluding Magasin, own bought sales accounted for 81.4% of gross transaction value in the first half, up from 75.6% in the same period last year. Including Magasin, which at present has much lower own bought participation, own bought sales accounted for 78.6% of gross transaction value in the half.

 

A number of new product ranges were introduced during the first half, most notably Principles by Ben de Lisi and H! by Henry Holland which joined the Designers at Debenhams portfolio. The launch of Principles in 125 stores saw the return of a much-loved, much-missed high street favourite, now designed by Ben de Lisi. Customers have responded extremely favourably to the new collection, which arrived in store in early February, and the brand will be expanded to all stores for Autumn Winter 2010. H! by Henry Holland is a new direction for Designers at Debenhams, being the first in the portfolio designed for young fashion customers. The brand launched in 60 stores at the very end of the half and early indications are again favourable.

 

The new own bought brands introduced over the past 12 months have continued to thrive and grow with extensions to both product range and store coverage in a number including Butterfly by Matthew Williamson, women's Mantaray, Ben de Lisi home and sports and leisure. Childrenswear brand Bluezoo has undoubtedly contributed to the market share growth in that category over the past six months.

 

Stock levels continue to be managed tightly. Total stock in the business has increased by 14.8%, largely as a result of the significant increase in own bought space and the acquisition of Magasin. However stock density on a like-for-like basis was 2.5% lower at the end of the first half than the corresponding time last year. At the end of the half terminal stocks were at an historically low level of 2.6%.

 

There has been significant cost pressure on many elements of the supply chain during the first half, including commodity prices, fuel/energy prices and freight prices. Sterling has also continued to devalue against the US dollar. Significant effort has therefore been required to mitigate these cost pressures. The nature of the Debenhams' supply chain, whereby the majority of products are sourced directly from suppliers on a "freight on board" basis - and the longstanding supplier relationships that this model facilitates - has enabled these cost pressures to be mitigated such that there has in fact been a margin gain in the first half from lower cost prices compared to last year.

 

Space Expansion

 

A disciplined approach to capital expenditure which focuses on the features that make a real difference to customers results in Debenhams achieving strong returns from new store space and from refitting existing core stores. As such, opening new stores and upgrading older stores are key parts of the Group's strategy.

 

New stores

 

Total space increased by 1,085,000 square feet in the first half, including 897,000 square feet from the Magasin du Nord acquisition. Space at the end of the first half of 12,131,000 square feet was 9.8% higher than at the start of the period. Average space increased by 7.1% during the half (2.0% excluding Magasin).

 

Four new stores were opened during the first half. These comprise a flagship department store in Newcastle-upon-Tyne which opened in February 2010 and three

 

Desire stores in Kidderminster (opened September 2009), Monks Cross (opened October 2009) and Witney (opened October 2009). 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. Two further department stores are scheduled to open in the second half of the year: Carmarthen in April 2010 and Bury in July 2010.

 

Store refits

 

It was announced at the time of the full year results in October that the store refit programme would recommence after the Christmas/January sale trading period having been largely on hold for the past 18 months,. The good performance of the Cardiff store which was refitted last summer has led to an acceleration of the programme. Major refits are underway in Glasgow, Manchester and Swindon which will be completed by the summer. A number of store makeovers are also planned for the second half, including the Bristol store. Brand makeovers of Rocha.John Rocha, Red Herring and Jeff Banks are also being rolled out across the store estate.

 

Looking forward, two department stores are scheduled to open in the 2011 financial year: a 125,000 square feet store in Bath which is due to open in September 2010 and the resited Newbury store in April 2011.

 

International franchise stores

 

New international franchise stores were opened during the first half in Iran and Vietnam, taking the total at the end of the half to 51 stores in 18 countries (including three closures). A further five new stores have opened since the end of the half, including market entry in Egypt and Malta. In the remainder of the second half, new stores are scheduled to open in Azerbaijan, Iran, Kazakhstan and Slovakia.

 

The international business continues to perform well despite some signs of softening in the retail sector in some of the markets of operation. Sales increased by 4.3% during the first half to 2.3% of the Group's gross transaction value.

 

Magasin du Nord

 

Debenhams acquired Magasin du Nord, the leading department store chain in Denmark, during the first half. The Group took control of the business in November 2009.

 

Magasin du Nord comprises six department stores, four in the Copenhagen area plus Århus and Odense.

 

Magasin has performed in line with internal expectations since acquisition and work is now commencing to deliver the anticipated returns. This centres around: margin expansion through increasing the own bought sales mix by introducing selected Debenhams' brands; leveraging the Debenhams' buying infrastructure and lowering prices to widen customer appeal; operational synergies to reduce costs; space expansion; and introducing multi-channel activities.

 

Multi-channel development

 

Developing a true multi-channel business - rather than just a "bricks-and-mortar retailer with a website" - is an important strategic aim. The focus is around employing technology to increase customer choice and to widen availability and ranging.

 

 

The multi-channel business continued to grow strongly in the first half of the year. Sales increased by 85.9% to £50.6 million in the period. Some 1.5 million visits have been recorded per week.

 

The new look website launched in November 2009 with many additional features, improved navigation and better online merchandising.

 

A number of important developments have also now been launched. In-store ordering is now available in all stores on an assisted basis and is generating strong returns. Technology is currently being sourced to facilitate the introduction of self-service customer order and service points during next year. Collect-from-store was introduced in all stores in March and is also proving popular with customers, accounting for 22% of orders in the first month. International delivery to seven destinations has also been launched and is generating incremental business even though the service has yet to be marketed.

 

Balance sheet management

 

Ensuring the business has the right capital structure whilst at the same time maintaining an appropriate level of investment for future growth continues to be an important issue for the board.

 

Net debt has been reduced substantially over the past year and ended the half £415.7 million lower than at the same point last year due to the capital raising that took place in June 2009 and strong cash generation from within the business.

 

During the first half, £175.0 million of debt was repaid (comprising £100.0 million in October and £75.0 million in January). A further £17.0 million was bought back in the market in the first half. As at 13 April 2010, a total of £84.7 million of debt has been bought back since the programme commenced at an aggregate discount of c.4%.

 

All scheduled debt repayments of the term loan have been made including the £150.0 million repayment which was originally due in May 2010. On the back of strong cash generation and good progress on reducing net debt, work is already well advanced towards refinancing the Group's debt prior to the May 2011 repayment date.

 

 

BOARD OF DIRECTORS

 

Nigel Northridge joined the board on 1 January 2010 and was appointed chairman on 1 April 2010 following the retirement of John Lovering on 31 March 2010.

 

Paul Pindar will retire from the board when his term as a non-executive director ends on 30 April 2010. The board would like to thank Mr. Pindar for his wise counsel and valuable contribution to the Company. Dennis Millard will succeed Mr. Pindar as senior independent director.

 

The board of directors as at 13 April is as follows: Nigel Northridge (chairman), Rob Templeman (chief executive), Michael Sharp (deputy chief executive), Chris Woodhouse (finance director), Adam Crozier (non-executive director), Martina King (non-executive director), Dennis Millard (non-executive director), Paul Pindar (non-executive director) and Sophie Turner Laing (non-executive director).

 

 

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 2009 (see pages 36 to 38 of that document). The risks which are most relevant to the second half of the financial year 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

 

For the 31 weeks to 3 April 2010, gross transaction value increased by 8.6% compared with the previous year. Like-for-like sales increased by 0.3% for the same period. Gross margin continued to be significantly ahead of last year.

 

Looking forward, the trading environment is expected to be broadly neutral for Debenhams in the second half. We will maintain our focus on driving the business forward through self help measures to achieve our strategic goals and build on the good performance of the first half. We believe that the work we have done to improve our own bought ranges, including Designers at Debenhams, both in terms of product design, quality and value and increasing the own bought mix, will continue to find favour with customers and provide a solid platform for margin expansion and market share growth.

 

 

Note on future reporting: from now on, Debenhams will provide current trading information four times a year: January IMS, half year trading update, July IMS and full year trading update. Current trading information will no longer be provided with the announcement of the half year or full year results.

 

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.

 

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 operates 164 stores in the UK, Republic of Ireland and Denmark, comprising 151 full departments stores and 13 Desire by Debenhams stores, which is a small store concept featuring an edited product range. Debenhams also has 56 international franchise stores in 20 countries. Debenhams' online store is available at www.debenhams.com.

 

Designers at Debenhams include Ted Baker, Jasper Conran, Erickson Beamon, FrostFrench, Henry Holland, 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 interim condensed consolidated financial information in the half-yearly financial report for the 26 weeks ended 27 February 2010, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated 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 interim condensed consolidated financial informationincluded 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 interim condensed consolidated financial informationin 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 interim condensed consolidated financial information in the half-yearly financial report for the 26 weeks ended 27 February 2010 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 London

13 April 2010

Consolidated Income Statement

For the 26 weeks ended 27 February 2010

		Note	Unaudited 26 weeks to 27 February 2010	Unaudited 26 weeks to 28 February 2009	Audited 52 weeks to 29 August 2009
			£m	£m	£m
Revenue		2	1,187.8	1,064.8	1,915.6
Cost of sales			(1,001.2)	(886.0)	(1,650.7)
Analysed as
Cost of sales before exceptional items			(991.1)	(886.0)	(1,650.7)
Exceptional cost of sales		4	(10.1)	-	-
Gross profit			186.6	178.8	264.9
Distribution costs			(28.9)	(24.9)	(45.3)
Administrative expenses			(23.7)	(19.2)	(37.4)
Analysed as
Administrative expenses before exceptional items			(21.2)	(19.2)	(37.4)
Exceptional administrative expenses		4	(2.5)	-	-
Other exceptional income		4,5	6.6	-	-
Operating profit			140.6	134.7	182.2
Analysed as
Operating profit before exceptional items			146.6	134.7	182.2
Exceptional items		4,5	(6.0)	-	-
Interest receivable and similar income		6	4.4	0.6	1.3
Interest payable and similar charges		7	(30.5)	(33.1)	(62.7)
Profit before taxation			114.5	102.2	120.8
Taxation		8	(34.4)	(21.0)	(25.7)
Analysed as
Taxation before exceptional items		8	(36.3)	(21.0)	(25.7)
Taxation credit on exceptional items			1.9	-	-
Profit for the financial period attributable to equity shareholders			80.1	81.2	95.1

 

Earnings per share attributable to the equity shareholders

				Pence per share			Pence per share			Pence per share
Basic			10	6.2			9.3			10.0
Diluted			10	6.2			9.3			10.0

 

The notes on pages 16 to 23 form an integral part of this condensed consolidated interim financial information.

Consolidated Statement of Comprehensive Income

For the 26 weeks ended 27 February 2010

 

		Note		Unaudited 26 weeks to 27 February 2010	Unaudited 26 weeks to 28 February 2009	Audited 52 weeks to 29 August 2009
				£m	£m	£m
Profit for the financial period				80.1	81.2	95.1
Other comprehensive income
Actuarial gain/(loss) on pension schemes		12		13.1	(41.3)	(93.6)
Deferred tax movement on pension schemes				(3.7)	11.6	26.2
Change in the value of available for sale investments				(0.3)	(2.9)	(2.2)
Currency translation differences				(3.4)	(1.0)	(0.3)
Cash flow hedges
- net fair value gains/(losses)				21.3	3.1	(12.8)
- tax on net fair value (gains)/losses				(6.0)	(0.9)	3.6
- reclassified and reported in net profit				3.8	0.8	-
- tax on items reclassified and reported in net profit				(1.1)	(0.2)	-
- recycled and adjusted against the cost of inventory				(0.5)	(15.7)	(27.9)
- tax on amounts recycled against the cost of inventory				0.1	4.5	7.8
Total other comprehensive income/(expense)				23.3	(42.0)	(99.2)
Total comprehensive income/(expense) for the period				103.4	39.2	(4.1)

The notes on pages 16 to 23 form an integral part of this condensed consolidated interim financial information.

 

Consolidated Balance Sheet

At 27 February 2010

	Note		Unaudited 27 February 2010	Unaudited 28 February 2009	Audited 29 August 2009
			£m	£m	£m
ASSETS
Non-current assets
Intangible assets	11		841.6	838.5	839.9
Property, plant and equipment	11		668.2	677.4	669.2
Financial assets
- Available-for-sale investments			8.5	8.1	8.8
- Derivative financial instruments			3.6	2.9	0.2
Other receivables	5		17.5	-	-
Deferred tax assets			75.4	56.7	80.6
			1,614.8	1,583.6	1,598.7
Current assets
Inventories			286.9	249.9	270.9
Trade and other receivables			72.5	58.6	68.5
Derivative financial instruments			10.3	40.0	9.5
Cash and cash equivalents			92.4	139.3	188.2
			462.1	487.8	537.1
LIABILITIES
Current liabilities
Financial liabilities
- Bank overdraft and borrowings			(2.3)	(173.5)	(92.6)
- Derivative financial instruments			(5.6)	(0.9)	(24.2)
Trade and other payables			(483.8)	(415.5)	(458.6)
Current tax liabilities			(50.3)	(41.7)	(34.0)
Provisions for liabilities and charges			(5.9)	(0.6)	(2.1)
			(547.9)	(632.2)	(611.5)
Net current liabilities			(85.8)	(144.4)	(74.4)
Non-current liabilities
Financial liabilities
- Bank overdraft and borrowings			(601.6)	(893.0)	(685.9)
- Derivative financial instruments			(4.4)	(28.3)	(8.0)
Deferred tax liabilities			(79.0)	(77.9)	(78.3)
Other non-current liabilities			(280.7)	(268.5)	(273.0)
Provisions for liabilities and charges			(0.5)	(0.2)	(0.2)
Retirement benefit obligations	12		(35.9)	(8.7)	(53.6)
			(1,002.1)	(1,276.6)	(1,099.0)
NET ASSETS			526.9	162.6	425.3
SHAREHOLDERS' EQUITY
Share capital	13		0.1	0.1	0.1
Share premium			682.9	682.9	682.9
Merger reserve			1,504.7	1,200.9	1,504.7
Reverse acquisition reserve			(1,199.9)	(1,199.9)	(1,199.9)
Hedging reserve			(0.9)	2.4	(18.5)
Other reserves			(1.1)	1.1	2.6
Retained earnings			(458.9)	(524.9)	(546.6)
TOTAL EQUITY			526.9	162.6	425.3

The notes on pages 16 to 23 form an integral part of this condensed consolidated interim financial information.

 

Consolidated Statement of Changes in Equity

At 27 February 2010

 

	Share capital and Share premium   £m	Merger reserve         £m	Reverse acquisition reserve       £m	Retained earnings         £m	Hedging reserve         £m	Other reserve         £m	Total           £m
Balance at 31 August 2008	683.0	1,200.9	(1,199.9)	(574.6)	10.8	5.1	125.3
Profit for the financial period	-	-	-	81.2	-	-	81.2
Actuarial loss on pension schemes	-	-	-	(41.3)	-	-	(41.3)
Deferred tax movement on pension schemes	-	-	-	11.6	-	-	11.6
Change in the value of available for sale investments	-	-	-	-	-	(3.0)	(3.0)
Currency translation differences	-	-	-	-	-	(1.0)	(1.0)
Cash flow hedges
- net fair value gains (net of tax)	-	-	-	-	2.2	-	2.2
- reclassified and reported in net profit (net of tax)	-	-	-	-	0.6	-	0.6
- recycled and adjusted against the cost of inventory (net of tax)	-	-	-	-	(11.2)	-	(11.2)
Total comprehensive income and expense for the financial period	-	-	-	51.5	(8.4)	(4.0)	39.1
Share based payment charge	-	-	-	0.6	-	-	0.6
Dividends paid	-	-	-	(4.3)	-	-	(4.3)
Shares issued in lieu of dividends	-	-	-	1.9	-	-	1.9
Total transactions with owners	-	-	-	(1.8)	-	-	(1.8)
Balance at 28 February 2009	683.0	1,200.9	(1,199.9)	(524.9)	2.4	1.1	162.6
Balance at 31 August 2008	683.0	1,200.9	(1,199.9)	(574.6)	10.8	5.1	125.3
Profit for the financial period	-	-	-	95.1	-	-	95.1
Actuarial loss on pension schemes	-	-	-	(93.6)	-	-	(93.6)
Deferred tax movement on pension schemes	-	-	-	26.2	-	-	26.2
Change in the value of available for sale investments	-	-	-	-	-	(2.2)	(2.2)
Currency translation differences	-	-	-	-	-	(0.3)	(0.3)
Cash flow hedges
- net fair value losses (net of tax)	-	-	-	-	(9.2)	-	(9.2)
- recycled and adjusted against the acquisition cost of inventory	-	-	-	-	(20.1)	-	(20.1)
Total comprehensive income and expense for the financial year	-	-	-	27.7	(29.3)	(2.5)	( 4.1)
Share based payment charge	-	-	-	0.3	-	-	0.3
Share issue	-	303.8	-	-	-	-	303.8
Discount arising on repurchase of term loan facility (net of tax)	-	-	-	2.4	-	-	2.4
Dividends paid	-	-	-	(4.3)	-	-	(4.3)
Shares issued in lieu of dividends	-	-	-	1.9	-	-	1.9
Total transactions with owners	-	303.8	-	0.3	-	-	304.1
Balance at 29 August 2009	683.0	1,504.7	(1,199.9)	(546.6)	(18.5)	2.6	425.3

 

	Share capital and Share premium   £m	Merger reserve         £m	Reverse Acquisition reserve       £m	Retained earnings         £m	Hedging reserve         £m	Other reserve         £m	Total           £m
Balance at 29 August 2009	683.0	1,504.7	(1,199.9)	(546.6)	(18.5)	2.6	425.3
Profit for the financial period	-	-	-	80.1	-	-	80.1
Actuarial gain on pension schemes	-	-	-	13.1	-	-	13.1
Deferred tax movement on pension schemes	-	-	-	(3.7)	-	-	(3.7)
Change in the value of available for sale investments	-	-	-	-	-	(0.3)	(0.3)
Currency translation differences	-	-	-	-	-	(3.4)	(3.4)
Cash flow hedges
- net fair value gains (net of tax)	-	-	-	-	15.3	-	15.3
- reclassified and reported in net profit (net of tax)	-	-	-	-	2.7	-	2.7
- recycled and adjusted against the cost of inventory (net of tax)	-	-	-	-	(0.4)	-	(0.4)
Total comprehensive income and expense for the financial period	-	-	-	89.5	17.6	(3.7)	103.4
Share based payment charge	-	-	-	0.6	-	-	0.6
Discount arising on repurchase of term loan facility (net of tax)	-	-	-	(2.4)	-	-	(2.4)
Total transactions with owners	-	-	-	(1.8)	-	-	(1.8)
Balance at 27 February 2010	683.0	1,504.7	(1,199.9)	(458.9)	(0.9)	(1.1)	526.9

The notes on pages 16 to 23 form an integral part of this condensed consolidated interim financial information.

 

Consolidated Cash Flow Statement

For the 26 weeks ended 27 February 2010

 

			Note	Unaudited 26 weeks to 27 February 2010	Unaudited 26 weeks to 28 February 2009	Audited 52 weeks to 29 August 2009
				£m	£m	£m
Cash flows from operating activities
Cash generated from operations			14	203.9	160.4	241.0
Interest received				1.6	0.6	1.1
Interest paid				(29.1)	(29.3)	(58.4)
Tax paid				(21.7)	(10.9)	(25.3)
Transaction costs on acquisition of Magasin				(0.3)	-	-
Net cash generated from operating activities				154.4	120.8	158.4
Cash flows from investing activities
Purchase of property, plant and equipment				(36.1)	(50.4)	(77.0)
Purchase of intangible assets				(3.2)	(0.8)	(7.5)
Purchase of subsidiary - Magasin				(7.5)	-	-
Net debt acquired on acquisition of Magasin				(2.3)	-	-
-
Net cash used in investing activities				(49.1)	(51.2)	(84.5)
Cash flows from financing activities
Repayment of term loan facility				(159.7)	-	(150.0)
Repurchase of term loan facility				(39.1)	-	(35.5)
Proceeds from issue of new shares				-	-	323.2
Share issue costs				(4.7)	-	(14.7)
Dividends paid				-	(2.4)	(2.4)
Finance lease payments				-	(0.1)	(0.1)
Capitalised debt issue costs				-	-	(3.3)
Net cash (used in)/generated from financing activities				(203.5)	(2.5)	117.2
Net (decrease)/increase in cash and cash equivalents				(98.2)	67.1	191.1
Cash and cash equivalents at beginning of financial period				188.2	(2.9)	(2.9)
Cash and cash equivalents at end of financial period			15	90.0	64.2	188.2

 

The notes on pages 16 to 23 form an integral part of this condensed consolidated interim financial information.

 

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 2009 except as described below. 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 2009.

The Group's interim condensed consolidated financial information is not audited and does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. Comparative figures for the 52 weeks ended 29 August 2009 have been extracted from the Group's 2009 Annual Report and Financial Statements, on which the auditors gave an unqualified opinion and did not include a statement under Section 498 of the Companies Act 2006. The full financial statements for those 52 weeks have been filed with the Registrar of Companies.

The Group has adopted the following new standards and interpretations for the first time for the 52 weeks beginning 30 August 2009:

·; IAS 1 (Revised) 'Presentation of Financial Statements' requires that the Group presents either one performance statement - 'Statement of Comprehensive Income'; or two statements - 'Income Statement' and 'Statement of Comprehensive Income'. The Group has elected to present two statements. IAS 1 also requires the presentation of a 'Statement of Changes in Equity' to be presented with the same prominence as all other statements. The interim report has been prepared using these revised disclosures.

·; IFRS 8 'Operating Segments' requires a management approach to the reporting of segmental information. Further details regarding the adoption of this standard and the new disclosures required are set out in note 3.

·; IFRS 3 (revised) 'Business Combinations' requires that all costs associated with business combinations are expensed directly to the income statement. Additionally any changes to contingent consideration must now be dealt with through the income statement subsequent to acquisition.

·; IFRS 7 (Revised) 'Financial Instruments - Disclosures'. The amendment requires additional disclosures regarding fair value measurement and liquidity risk. Full disclosures will be made in the Group accounts for the 52 weeks ended 28 August 2010.

·; IAS 27 (Revised) 'Consolidated and Separate Financial Statements'. This standard has not had a material impact on the Group.

The following new standards and interpretations are mandatory for the first time for the 52 weeks beginning 30 August 2009; however these are not currently relevant to the Group:

·; IFRIC 12 'Service Concession Arrangements'

·; IFRIC 14/IAS 19 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction'.

·; IFRIC 16 'Hedges of a Net Investment in a Foreign Operation'.

·; IFRIC 17 'Distributions of Non-Cash Assets to Owners'.

·; Amendment to IFRS 2 'Amendment to Vesting Conditions and Cancellations'.

·; IAS 23 (Revised) 'Borrowing Costs'.

·; Amendment to IAS 32 'Financial Instruments: Presentation'.

·; Amendment to IAS 39 'Financial Instruments: Recognition and Measurement'.

The following new standards and interpretations have been issued but are not effective for the 52 weeks beginning 30 August 2009 and have not been adopted early.

International Accounting Standards (IFRS)		Effective date
IFRS 2 amendment	Share Based Payments - Group Settled share based payment transactions	1 January 2010
IFRS 9	Financial Instruments	1 January 2013
IAS 32 amendment	Presentation on classification of rights issue	1 February 2010
IAS 24 amendment	Related Party Disclosures	1 January 2011
IFRIC Interpretations
IFRIC 15	Agreements for the Construction of Real Estate	1 January 2010
IFRIC 18	Transfers of Assets from Customers	31 October 2009
IFRIC 19	Extinguishing Financial liabilities with Equity Instruments	1 January 2010
IFRIC 14 amendment	Prepayments on a Minimum Funding Requirement	1 January 2011

 

2 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 and staff discounts, represents a better guide to the value of the overall activity of the Group.

			26 weeks to 27 February 2010	26 weeks to 28 February 2009	52 weeks to 29 August 2009
			£m	£m	£m
Gross transaction value			1,417.2	1,307.2	2,339.7

 

 

3 Segmental information

IFRS 8 requires disclosure of the operating segments which are reported to the Chief Operating Decision Maker ("CODM"). The CODM has been identified as the executive management board, which includes the executive directors and other key management. It is the executive board who have responsibility for planning and controlling the activities of the Group.

The Group's reportable segment has been identified as Retail. The operating segment Magasin is not a reportable segment as it does not exceed 10 per cent of Group revenues, profits or gross assets; however it has been presented separately within the segmental analysis below. The segments are reported to the CODM to operating profit level, using the same accounting policies as applied to the Group accounts.

Segmental analysis of results		Retail £m	Magasin £m	Total £m
26 weeks ended 27 February 2010
Gross transaction value		1,329.0	88.2	1,417.2
Concessions and staff discounts		(190.5)	(38.9)	(229.4)
External revenue		1,138.5	49.3	1,187.8
Operating profit before exceptional items		143.5	3.1	146.6
Exceptional items		(4.2)	(1.8)	(6.0)
Operating profit after exceptional items		139.3	1.3	140.6
Interest receivable and similar income		4.4	-	4.4
Interest payable and similar costs		(30.1)	(0.4)	(30.5)
Profit before tax		113.6	0.9	114.5
26 weeks ended 28 February 2009
Gross transaction value		1,307.2	-	1,307.2
Concessions and staff discounts		(242.4)	-	(242.4)
External revenue		1,064.8	-	1,064.8
Operating profit		134.7	-	134.7
			-
Interest receivable and similar income		0.6	-	0.6
Interest payable and similar costs		(33.1)	-	(33.1)
			-
Profit before tax		102.2	-	102.2
Year ended 29 August 2009
Gross transaction value		2,339.7	-	2,339.7
Concessions and staff discounts		(424.1)	-	(424.1)
External revenue		1,915.6	-	1,915.6
Operating profit		182.2	-	182.2
Interest receivable and similar income		1.3	-	1.3
Interest payable and similar costs		(62.7)	-	(62.7)
Profit before tax		120.8	-	120.8

 

 

4 Exceptional items

Exceptional items comprise the following (the reportable segment of each item is shown in brackets):

			Note	26 weeks to 27 February 2010 £m
Exceptional cost of sales
Provision for restructuring (Retail)			a	(10.1)
Exceptional administrative expenses
Provision for restructuring (Magasin)			b	(1.8)
Costs on acquisition of Magasin (Retail)			c	(0.7)
				(2.5)
Other exceptional income
Bargain purchase credit - Magasin (Retail)			d	6.6
Net exceptional items				(6.0)

There were no exceptional costs in the 26 weeks to 28 February 2009 or in the 52 weeks to 29 August 2009.

a The provision for redundancy recognised in cost of sales represents the amount expected to be incurred within the Republic of Ireland.

b The provision for restructuring recognised in administrative expenses is the Group's best estimate of the amount expected to be incurred for restructuring costs in Magasin. Further details of this amount are set out in note 5.

c The total of the directly attributable transaction costs on the acquisition of Magasin included in the accounts within exceptional administrative expenses is £0.7m.

d Further details of the bargain purchase credit on acquisition of Magasin are set out in note 5.

5 Acquisition of Magasin du Nord ('Magasin')

On 7 November 2009 the Group entered into an agreement to purchase 100 per cent of the shares of A/S Th. Wessell & Vett, Magasin du Nord ('Magasin'), a company registered in Denmark owning six department stores. Consideration of DKK 63.6m (£7.5m) was paid in January 2010 in cash.

 

A further amount of up to DKK 15m (£1.8m) of contingent consideration has been deferred until September 2010 at the latest. A provision for Magasin restructuring costs has been recognised for £1.8m, which has been charged to exceptional administrative expenses during the period. No amount has been recognised in the purchase price of Magasin relating to this contingent consideration, as the Group considers, in accordance with the agreement between the parties, that it is entitled to use the full amount towards restructuring costs of Magasin.

 

An initial estimate of the fair value of the assets acquired is set out below:

				Fair value £m
Recognised assets and liabilities of Magasin at 7 November 2009
Property, plant and equipment				11.1
Intangible assets				2.6
Inventories				13.2
Trade and other receivables				23.7
Trade and other payables				(34.2)
Bank overdrafts and borrowings				(2.3)
Total				14.1
Fair value of consideration transferred				7.5
Bargain purchase credit				6.6

 

The Group has recognised a bargain purchase credit within other exceptional income in operating profit, of £6.6m, relating to the acquisition of Magasin, as the fair value of the net assets was in excess of the amount paid. The Group considers that the bargain purchase credit arose due to the economic climate.

 

The Group is in the process of finalising the acquisition of Magasin and the above values may be amended in the financial statements for the year ending 28 August 2010.

 

Total trade and other receivables include contractual lease deposits of £17.5m. These amounts have been presented as non current assets within other receivables. Trade and other receivables are all stated at fair value.

 

The impact on the results of Debenhams plc for the period from acquisition to 27 February 2010 is to increase revenue by £49.3m and increase operating profit before exceptional items by £3.1m.

 

Magasin demerged certain business activities on 31 October 2009. Prior to this date Magasin reported all businesses as one unit within its management accounts. For this reason it has not been practicable to estimate the effects of the acquisition of Magasin on the results for the full 26 week period to 27 February 2010.

6 Interest receivable and similar income

		26 weeks to 27 February 2010	26 weeks to 28 February 2009		52 weeks to 29 August 2009
		£m	£m		£m
Interest on bank deposits		0.6	0.6		1.3
Discount arising on debt repurchase		3.8	-		-
Interest receivable and similar income		4.4	0.6		1.3

 

7 Interest payable and similar charges

		26 weeks to 27 February 2010 £m	26 weeks to 28 February 2009 £m	52 weeks to 29 August 2009 £m
Interest payable and similar charges
Bank loans and overdrafts		(22.4)	(29.3)	(55.0)
Charge arising from recycling of cash flow hedge		(3.8)	-	-
Amortisation of issue costs on loans		(3.1)	(2.0)	(4.4)
Interest payable on finance leases		(1.2)	(1.8)	(3.3)
Interest payable and similar charges		(30.5)	(33.1)	(62.7)

8 Taxation

The taxation charge for the 26 weeks ended 27 February 2010 is based on an estimated effective tax rate for the full year of 30.1% (52 weeks ended 29 August 2009: 21.3%). This is higher than the standard rate of corporation tax (28%) due to variances between UK and overseas tax rates and items not deductible for tax purposes. The rate for the 52 weeks ended 29 August 2009 is low due to adjustments in respect of prior periods.

9 Dividends

The Company did not pay a final dividend in respect of the 52 weeks ended 29 August 2009. The directors are not proposing a dividend in respect of the 26 weeks ended 27 February 2010 (26 weeks to 28 February 2009: £nil).

 

10 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; 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 share		26 weeks to 27 February 2010		26 weeks to 28 February 2009		52 weeks to 29 August 2009
		Basic	Diluted	Basic	Diluted	Basic	Diluted
		£m	£m	£m	£m	£m	£m
Profit for the financial period		80.1	80.1	81.2	81.2	95.1	95.1
		Number m	Number m	Number m	Number m	Number m	Number m
Weighted average number of shares		1,286.8	1,286.8	876.7	876.7	950.8	950.8
Shares held by ESOP (weighted)		(1.0)	(1.0)	(1.4)	(1.4)	(1.4)	(1.4)
Adjusted weighted average number of shares		1,285.8	1,285.8	875.3	875.3	949.4	949.4
		Pence per share	Pence per share	Pence per share	Pence per share	Pence per share	Pence per share
Earnings per share		6.2	6.2	9.3	9.3	10.0	10.0

 

 

 

11 Tangible and intangible assets and commitments

 

			Tangible and intangible assets
			27 February 2010	28 February 2009	29 August 2009
			£m	£m	£m
Opening net book amount			1,509.1	1,534.1	1,534.1
Additions			47.6	26.3	67.1
Foreign currency revaluation			0.7	4.2	4.2
Disposals			(0.1)	(0.1)	(0.2)
Depreciation and amortisation			(47.5)	(48.0)	(96.0)
Accelerated depreciation			-	(0.6)	(0.1)
Closing net book amount			1,509.8	1,515.9	1,509.1

 

Capital commitments contracted but not provided for by the Group amounted to £8.1 million (29 August 2009: £7.2 million; 28 February 2009: £1.8 million).

 

12 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 2008 and are updated as at each relevant period-end for the purposes of IAS 19 'Employee benefits' by Towers Watson Limited, a qualified independent actuary. Relevant data obtained by the actuary from this valuation has been used when calculating the IAS 19 'Employee benefits' valuation at 27 February 2010, 29 August 2009 and 28 February 2009.

The major assumptions used by the actuary are given below. The mortality assumptions remain consistent with those disclosed in the Group's 2009 Annual Report and Financial Statements.

			27 February 2010	28 February 2009	29 August 2009
			% pa	% pa	% pa
Discount rate			5.70	6.90	5.45
Price inflation			3.50	3.20	3.30
Rate of increase in salaries			3.50	3.20	3.30
Rate of increase in pension payments			3.50	3.20	3.30
Rate of increase for deferred pensioners			3.50	3.20	3.30

 

The movement in the net pension (liability)/asset is as follows:

			27 February 2010	28 February 2009	29 August 2009
			£m	£m	£m
(Deficit)/surplus at the start of the period			(53.6)	25.0	25.0
Contributions			3.6	3.6	7.1
Interest credit			1.0	4.0	7.9
Net actuarial gains/(losses) on change of assumptions			13.1	(41.3)	(93.6)
Deficit at the end of the period			(35.9)	(8.7)	(53.6)

 

13 Share capital

				£	Number
Ordinary shares of £0.0001 each
Authorised - At 27 February 2010, 29 August 2009				167,285	1,672,848,189
Authorised - At 28 February 2009				128,846	1,288,461,539
				£	Number
Issued and fully paid - Ordinary shares of £0.0001 each
At 28 February 2009				88,282	882,825,016
Firm placing and placing				33,059	330,592,432
Open offer				7,339	73,388,851
At 29 August 2009 and at 27 February 2010				128,680	1,286,806,299

 

14 Cash generated from operations

		26 weeks to 27 February 2010 £m	26 weeks to 28 February 2009 £m	52 weeks to 29 August 2009 £m
Profit for the financial period		80.1	81.2	95.1
Taxation		34.4	21.0	25.7
Depreciation and amortisation (note 11)		47.5	48.0	96.0
Accelerated depreciation (note 11)		-	0.6	0.1
Loss on disposal of property, plant and equipment		0.1	0.1	0.2
Bargain purchase credit on acquisition on Magasin (note 5)		(6.6)	-	-
Transaction costs of acquisition		0.7	-	-
Employee options granted during the year		0.6	0.6	0.3
Fair value losses/(gains) on derivative instruments		0.7	(7.8)	(0.6)
Net movements in provisions for liabilities and charges		2.9	(0.2)	1.3
Interest income (note 6)		(4.4)	(0.6)	(1.3)
Interest expense (note 7)		30.5	33.1	62.7
Difference between pension charge and contributions paid		(4.6)	(7.6)	(15.0)
Net movement in other non-current liabilities		7.7	42.7	47.2
Changes in working capital
Increase in inventories		(2.7)	(12.4)	(33.4)
Decrease/(increase) in trade and other receivables		1.9	(1.8)	(7.3)
Increase/(decrease) in trade and other payables		15.1	(36.5)	(30.0)
Cash generated from operations		203.9	160.4	241.0

 

 

15 Analysis of changes in net debt

		At 29 August  2009	Cash flow	Non cash movements	At 27 February 2010
		£m	£m	£m	£m
Analysis of net debt
Cash and cash equivalents		188.2	(95.8)	-	92.4
Bank overdrafts		-	(2.4)	-	(2.4)
Cash, cash equivalents and bank overdrafts		188.2	(98.2)	-	90.0
Debt due within one year		(88.9)	114.4	(21.2)	4.3
Debt due after one year		(642.8)	84.4	(2.4)	(560.8)
Finance lease obligations due within one year		(3.7)	-	(0.5)	(4.2)
Finance lease obligations due after one year		(43.1)	-	2.3	(40.8)
		(590.3)	100.6	(21.8)	(511.5)

The debt due after more than one year matures in May 2011.

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 page 7 of this interim report.

 

By order of the board

 

Paul Eardley

Company Secretary

13 April 2010