House of Fraser posts first profit since 2006

House of Fraser posted a modest profit on Wednesday - its first since 2006 - as the 59-store chain continued its turnaround under Chinese ownership.

Sales at the privately-held department store group rose 4.2% on a like-for-like basis in the 52 weeks to 31 January, with total gross transaction value of £1.3bn.

Its online sales grew 26.8% on a like-for-like basis, and represented 18.9% of total sales. Bricks-and-mortar store sales increased 0.1% like-for-like.

House of Fraser gross profit totalled £484.1m, up £23.9m on the prior year. Its profit before tax of £1.3m was the first profit since 2006, and adjusted EBITDA improved by 3% to £66.3m compared to the prior year (or 5.2% on a like-for-like basis).

"House of Fraser is pleased to report positive sales and margin growth over the full year, delivering the first profit before tax in 10 years,” said House of Fraser CEO Nigel Oddy.

“This was driven by continued progress across both our online and bricks and mortar stores, despite the volatile trading environment in the final quarter of fiscal year 2016.”

Oddy said the firm had continued to invest in itself throughout the year, strengthening its multichannel proposition and enhancing store environments with six “extensive” store refurbishments completed during the year.

The investment will continue in fiscal year 2017, he added, when House of Fraser planned to refurbish further stores and continue to develop its IT and ecommerce capabilities.

"The response to the launch of our SS16 collection has been encouraging despite a slower than expected start to the new financial year as has been documented across the retail sector.

“Looking ahead, whilst mindful of ongoing uncertainty around the EU referendum and the challenging market conditions experienced across the retail industry since the beginning of 2016, we remain cautiously optimistic and believe we are well positioned to deliver further growth in the year ahead,” Oddy concluded.