Rise in profits for Debenhams

The department store is expected to post improved figures, amid speculation of a Finnish purchase

Debenhams will post an up-beat first-half trading update on Tuesday amid growing City speculation that it is looking to buy Finland's Stockmann chain of department stores.

Analysts at Investec forecast a pre-tax profit of £116m up on £101.7m a year earlier, calming fears that bad weather had affected sales. The first half is the most important for Debenhams as it includes Christmas sales.

"Trading has been better than expected," said David Jeary, an Investec retail analyst, adding: "There has been a healthy increase in gross profit margin."

Investec forecasts full-year pre-tax profits of £141m from turnover of £2.57bn for 2010, up on last year's £125.2m profit.

James Monro of Standard & Poors Equity Research said of the Finnish chain speculation: "Stockmann is a good acquisition target. Basically it's the Finnish Debenhams. It's a good time to get there, before their stock price shoots up."

Stockmann runs 120 fashion stores in Finland under the Seppala brand, plus seven own brand department stores. It also operates in Lithuania, Latvia, Estonia and Russia. Mr Monro said that it would provide Debenhams with an "excellent foothold" in the Russian market which has vast potential as consumer credit begins to flow.

Stockmann's portfolio also boasts Swedish clothes giant Lindex which it acquired in 2007. The brand has close to 400 stores spread throughout Europe, the Middle East and Russia.

Debenhams is also rumoured to be looking at tie-ins closer to home. "The market has wondered if there is a deal to be done with House of Fraser," said Mr Jeary, adding: "It's possible."

Shareholders also expect to be updated on how the chief executive, Rob Templeman, and his team plan to deal with Debenhams' debts. "Our view is that the debt burden of £500m is still large compared to competitors, though capital raising has reduced it and raising more will be simpler," said Mr Jeary.

Debenhams management has hinted that debt for the first half would be lower than the £525m forecast. The chain finished the shortened trading week up 3.3p at 78.95p.

House of Fraser has been boosted by the news that Atradius, the credit insurer that pulled cover to the retailer during the recession, is once again offering suppliers insurance against its collapse. Atradius had previously refused to reinstate cover to suppliers despite an upturn in House of Fraser's fortunes since the turn of the year.

A spokesman for the chain said that cover had returned following a 10 per cent jump in like-for-like sales for the past nine weeks, with online revenues increasing by 200 per cent. He added that its house brands division had also prospered with sales up 100 per cent over the same period.

News of Atradius's decision comes ahead of the publication of credit insurance figures from the Association of British Insurers next week, which will show that claims from such policies rocketed by 95 per cent during 2009 compared to the previous year.

Credit insurers paid out claims worth £320m in 2009, up from £164m the previous year. "While trade credit insurers paid out a record amount during 2009, [the fourth quarter] marked an improvement with the number of new claims down 23 per cent on the previous quarter" said Nick Starling, the ABI's director of general insurance and health.

Start your day with The Independent, sign up for daily news emails
News
people

Harry Potter actor suffered 'severe flu-like symptoms' on a flight from London to Orlando

Arts and Entertainment
Legendary Star Wars filmmaker George Lucas
film
News
news
Arts and Entertainment
tv

First full-length look is finally here

PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Frank Turner performing at 93 Feet East
musicReview: 93 Feet East, London
News
Toronto tops the charts across a range of indexes
news

World cities ranked in terms of safety, food security and 'liveability'

Extras
indybest
Voices
A mother and her child
voices
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee