Bhs full-year profit down 40 per cent

Bhs Group, the department store chain owned by billionaire Philip Green, posted a 40 per cent fall in full-year operating profit yestrerday, and for the fourth year running Mr Green decided not to take a dividend.

Mr Green said the trading outlook was "very, very difficult" to read after Bhs reported an operating profit of £30.2 million for the year to March 31, compared with £50 million the previous year and the record £112 million in 2004.

Total sales fell 1.4 per cent to £860.3 million and were down 2.9 per cent on a like-for-like basis, which strips out the contribution from new space opened in the year.

Cash generation fell 33 per cent to £72 million, and year-end debt was £63 million, in line with last year.

Monaco-based Mr Green said the outcome was "a solid performance in an exceptionally challenging market".

He said Bhs suffered from sharply higher underlying costs. "Rent, rates, light, heat, transport, minimum wage; these don't go away," he said.

The decision to pay no dividend was down to Bhs's continuing refurbishment programme. Capital expenditure more than doubled to £53 million. The UK market remained competitive and unpredictable, said Mr Green.

"The last six weeks have seen sales down four per cent, reflecting not only the market but also the continued impact of the erratic weather patterns," he said. UK sales since the end of March were "slightly worse" than the figure for the last six weeks, while year to date international sales from franchise stores were up 14 per cent like-for-like.