Debenhams seeks to reassure investors

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Debenhams has rushed out a statement to try to reassure investors over its finances, but says annual profits will be below June’s downgraded forecast.

It says profit will be £33m, compared with previous guidance of £35-40m. The new estimate was in line with current market forecasts, the retailer said.

Shares plunged 16% after the company confirmed on Sunday it had appointed KPMG to help improve its performance.

The chain said on Monday that KPMG would help maximise shareholder value.

It said the the consultancy’s activities were also aimed at protecting other shareholders, “including our employees”.

‘Challenging’ trading

Debenhams said net debt would be about £320m, also in line with forecasts, and giving it “significant headroom” on the £520m it was permitted to borrow under current loan agreements.

It said that it had strengthened its financial position, giving it “comfortable liquidity” for the peak borrowing period ahead of Christmas.

Chief executive Sergio Bucher said the market environment remained “challenging and underlying trends deteriorated through the summer months”.

However, he said that the early weeks of the new season had “shown more positive trends”.

“Any sustained upturn would result in a rebound in our profit performance,” he added.