Debenhams interim profit up, CEO resignation confirmed

Department store chain Debenhams posted a rise in first half profit as it confirmed the resignation of chief executive Michael Sharp.

In its half year results for the 26 weeks to 27 February, the company reported pre-tax profit of £93.8m, up 5.5% from 2015, with basic earnings per share 5.1% higher at 6.2p.

Group like-for-like sales were up 1.1% and the company lifted its interim dividend by 2.5% to 1.025p per share.

Chief executive Michael Sharp said: “A strong operational performance resulted in a record Christmas, and further growth in first half profits against a good performance in the prior year. Our customers are responding positively to our multi-channel strategy, finding our mix of products and brands both compelling and great value for money.”

Sharp, who formally submitted his resignation to the company’s board on Thursday after announcing his intention to step down in October, said the company was on track to deliver full year results in line with market expectations.

“When I leave the business later this year I am confident that it will be in a good position to deliver continued sustainable growth under a strong and capable management team,” he said.

Debenhams said the process to appoint Sharp’s successor is well advanced and he will remain as chief executive until his successor is confirmed to ensure an smooth handover.

Peel Hunt, which rates the stock at ‘buy’, said: “This is a good set of results for Debenhams although uncertainty over management and the challenges of midmarket retail continue to weigh on the shares on 10x PER.”