Debenhams posts a ‘credit crunch defying’ profit of £104.2m in half-yearly pre-tax profits.

British department store Debenhams has reported a 10.7% rise to £104.2 million in half-yearly pre-tax profits.

Solid performance in the store’s own ranges, such as Designers at Debenhams, boosted profits for the company.

Net debt at the end of February also improved, reducing the figure by £66.8m since the year end to £927.2m.

Debenhams also experienced strong growth in debenhams.com with sales up by 29.7% and like-for-like sales in store were up 1.9%.

In the 26 weeks to 28 February, Debenhams opened up five new department stores as planned, creating 800 new jobs. Eight new international franchise stores also opened in the half year.

Expansion is set to continue with plans for a further nine stores to be opened in the next two years, which will create 1800 jobs.

Rob Templeman, Chief Executive of Debenhams, said: “The increase in profitability in the first half is a considerable achievement given the difficult trading conditions across the retail sector and reflects our commitment to producing stylish, quality products at exceptional value as well as a continuing focus on the levers that drive cash margin.”

However, amidst the current economic turmoil, Mr Templeman is feeling tentative about the future performance prospects. He said: “We remain cautious about the outlook for consumer confidence for the remainder of the year and we will continue to run the business accordingly, with an ongoing focus on cash profit.”

Many retailers have experienced falls in profit, with WH Smith recently announcing a 5% fall in half-year profits to £61m.