£50m profit at Bhs but still no divi for Green

With some analysts predicting the demise of Bhs in the face of stiff competition from Marks & Spencer and online retailers, Sir Philip offered causes for optimism.

Sales at the privately owned firm edged up 1.4% to £872.5 million in the year to the end of March, though likeforlikes fell by 1.5%. Profits rose 3% to £50 million, but Sir Philip resisted the temptation to pay himself a dividend.

"There's no need for me to take a dividend. I'd rather get the business back in the right place," he said.

Most of Bhs's 185 stores are in need of refurbishment, with 19 due to be completed by the end of the year.

Sir Philip, who bought the company in 1999 for £200 million when other retailers had written it off, says sales at stores that have already been redesigned have been "very encouraging".

"Obviously June, July, August were tough just due to unseasonable weather. Considering that, this was a pleasing result," he said. "There were no major dramas and the last few weeks have been favourable. It's a bit early to call what the season is going to be like, but it has started well."

Like-for-like sales in the last six weeks are up 3%, though it is not clear if this is a sign of returning consumer confidence or delayed sales from the wet summer.

"When people haven't shopped for quite a while, there is a bit of pent-up demand," he said.

Sir Philip is also busy promoting Topshop - part of the Arcadia chain that he owns - in the US and has offered £1 million for the safe return of Madeleine McCann.

As the fourth-richest man in Britain with wealth estimated at £3.6 billion, Sir Philip controls around 12% of the UK clothing market, meaning his results and views are closely watched.

He declined to say which rivals he thought had coped with the bad summer most skilfully.

"I never talk about the competition. It is so difficult to read different parts of the market anyway," he said.

He is expecting the troubles in financial markets to have at least some effect in the run-up to Christmas.

"I suppose, logically, one has to be conservative or concerned. All the things one reads about can't disappear. The stock market is defying any logical gravity and I don't think the rest of the financial markets have straightened themselves out. You have to believe

that some of this will come into the general market place," he added.

Even before the credit crunch, Bhs was being managed with caution. Bank debts have been reduced from £115 million to £62 million, improving the look of the balance sheet.

Sir Philip and his wife Tina own most of Arcadia, which includes Burton, Dorothy Perkins and Topshop. He famously paid himself a £1.1 billion dividend from Arcadia profits in 2005.