The department store Debenhams has revealed it will reintroduce its dividend after a two-year hiatus, as it posted a sharp uplift in full-year profits.
Michael Sharp, the deputy chief executive of Debenhams, which has 167 stores in the UK, Republic of Ireland and Denmark, said: "The repayment of the dividend represents the confidence in our business and that our prospects are good." Debenhams will reinstate the dividend at its 2011 interims.
Debenhams grew its headline pre-tax profits, before exceptionals, by 20.6 per cent to £151m for the 12 months to 28 August. A key driver of this uplift was the massive shift in its product mix that Debenhams has pushed through towards own-label lines, which typically have lower prices and therefore reduce sales per square foot, but deliver higher profit margins than the concession model.
Since its year end, underlying sales at Debenhams have bounced back into positive territory.