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Department store chain Debenhams has said that it is confident about its future prospects, despite wider concerns over the retail outlook.

Announcing its annual interim results the company revealed that it achieved an 11.5 per cent increase in pre-tax profits in the 52 weeks to September 1st.

Debenhams' profits before tax and exceptional items climbed to £131.4 million over the year, up from the £117.9 million reported in 2006.

The company said that its performance was primarily driven by the addition of 792,000 square feet of extra selling space, including the acquisition of nine Roches stores in Ireland and the opening of eight other new stores over the year.

However Debenhams reported a "disappointing" five per cent decline in like-for-like sales over the 12-month period, with weaker sales across its clothing ranges offsetting a good performance by other areas including health and beauty and accessories.

Nonetheless the retailer's sales now appear to be back on track, with like-for-like sales excluding the newly-acquired Irish stores up 2.1 per cent in the seven weeks to October 20th.

Debenhams also stressed that it is improving its overall market share and intends to open a further 29 stores over the next four years.

In addition the company has accelerated its store refurbishment programme and expects to complete the project within a two-year time frame.

Commenting on the results Debenhams' chief executive Rob Templeman said: "Despite wider concerns about the macro-economic environment and how this will impact on the retail sector, we are confident that the changes we are making throughout Debenhams are benefiting the business.

"Our new autumn/winter ranges are being well received and this, together with the refitting of stores and previous investment in a new IT platform and distribution centre, is improving the customer experience," he added.

Other leading UK retailers have previously warned that the sector has yet to see the impact of higher interest rates on the high street, warning that the outlook for trading remains uncertain in the key run up to Christmas.