Debenhams Group (AIM:DEBS) has guided FY27 Adjusted EBITDA to a double-digit improvement and targets net debt below 1x Adjusted EBITDA by year end, after reporting FY26 Adjusted EBITDA of £53.3m, up 34.6% year-on-year.
For the year ended 28 February, group revenue fell 24.7% to £917m while Group GMV pre-returns declined 21.6% to £1,820.7m as management pivoted to a higher-margin marketplace mix that lifted gross margin to 51.1%.
Marketplace mix rose to 34.1% of GMV with marketplace GMV up 14.9% to £620.4m, the Debenhams brand led the recovery with GMV of £730m (+11.6%) and £34.8m Adjusted EBITDA (+38.5%), and PrettyLittleThing swung from a £1m loss to a £14m profit so every brand is now profitable on an Adjusted EBITDA basis.
Net debt at year end was £93.2m, equivalent to 1.75x Adjusted EBITDA, statutory loss after tax narrowed to £108.3m and exceptional costs fell to £68.1m, after the group completed a new £175m facility and an oversubscribed £40m equity raise.
"With the most significant restructuring phases substantially complete and exceptional costs expected to reduce materially, FY27 is expected to be the year of further future profit growth and sustained free cash flow generation," Dan Finley, Group Chief Executive Officer.
It said Q1 FY27 GMV was up 0.5% year-on-year, May trading was approximately 8% ahead, operating costs are expected to fall towards a £100m exit rate and a US sublease should cut lease costs and generate an unaudited non-cash exceptional credit of c.£40m.
