Upscale retailer David Jones Ltd (ASX: DJS) today reported a record high first half profit after tax (PAT) of $105.7 million for the six months ended 29 January 2011 (1H11). This represents an increase of 5.2 per cent on 1H10 ($100.5 million).

The company’s department store business reported a 4.2 per cent increase in Earnings Before
Interest & Tax (EBIT) from $125.6 million in 1H10 to $130.9 million in 1H11.

The company said it was able to maintain its GP Margin within its target range through continued reallocation of space to high margin categories and the increase in department store exclusive brands, which protects the its competitive positioning.

DJ said its cash flow is strong with operating cash flow of $133.4 million at half year-end compared to $124.0 million at the end of 1H10.

Its balance sheet also remains healthy. Long-term net debt continues to be less than $100 million at the end of 1H11 with Gearing of 8.9 per cent.

Financial services business also performed in line with expectations delivering EBIT growth for 1H11 of 7.5 per cent, it said.

The David Jones American Express Card has obtained a material share of the new credit card account openings in the total market, since its launch in October 2008 and customer acquisitions continue to be ahead of target. The new value proposition launched in October 2010 has been well received and the Company is now focusing on increasing both the spend and balance of the cards in the portfolio.

Mr Zahra said, “Despite a very competitive environment in 1H11, with heavy promotional activity
by retailers, we are pleased to report that our 1H11 PAT was up 5.2 per cent. Our GP margin
remained within our target band of 39.5 per cent – 40 per cent, our CODB was reduced by 80 bp, our
Inventory was well managed and our interim dividend was up 1 cent to a record high first half of
13 cps fully franked.

“Our ability to deliver these strong results is testament to the strength of our Business Model and its ability to generate shareholder growth throughout the peaks and troughs of the economic cycle.

“Our Company has continued its stringent management of costs, making good progress in implementing the Cost Efficiency Initiatives we announced in September 2010.

The recent trading environment has been negatively influenced by adverse weather and significant events such as the floods in Queensland and Victoria, the earthquake and tsunami in Japan and the unrest in Libya. All of these have resulted in volatile markets and a deterioration in consumer sentiment.

A further update of trading conditions will be provided by the Company at its 3Q11 Sales announcement in May. This will include the Company’s trading performance over the Easter promotional period in mid/late April.

The Board of Directors has declared an Interim Dividend of 13 cents per ordinary share (cps) fully franked for the six months ended 29 January 2011.

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