Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.
(Sharecast News) - Debenhams Group - which rebranded from Boohoo earlier this year - reported a widening of its full-year losses on Tuesday as revenue fell, but struck an upbeat note on the outlook and said it was exploring the sale of PLT.
In the year to 28 February, adjusted pre-tax losses widened to £263.9m from £164.4m the year before. Group revenue fell 12% to £790.3m, with Debenhams putting this down largely to the growing importance of the marketplace model where commission income, rather than full transaction value, is recognised.
Adjusted earnings before interest, tax, depreciation and amortisation ticked up 3% to £41.6m, with the adjusted EBITDA margin improving by 80 basis points to 5.3%.
Debenhams said this was driven by successfully reducing its operating cost base post 1 November, in particular distribution and administrative expenses.
Chief executive Dan Finley said all of the company's brands are now profitable in terms of adjusted EBITDA.
Looking forward, Debenhams said it expects 1H FY26 adjusted EBITDA for continuing operations to be ahead of 1H FY25.
Finely said: "The business has been through a very challenging period which is reflected in these results. I want to assure shareholders that the business is taking the necessary actions, quickly and decisively, to address the challenges that we face. No stone will be left unturned," he said.
"As outlined in March, we have a clear plan as Debenhams Group to transform the business and a route map to generating sustainable profit growth. Our mission is to become the shopping destination of choice by connecting our community with the brands they love.
"We are focused on delivering on the huge opportunity ahead for the Debenhams brand. Work is progressing to reposition and right size the Youth Brands, with a laser focus on profitability and cash generation under new management.
"This will be a multi-year turnaround as was the case with the Debenhams brand. As part of our ongoing business review, we are exploring a potential sale of PLT. We are also assessing long-term options for our US and Burnley distribution sites to enhance efficiency and ensure alignment with our stock-lite strategy."
