Debenhams, the department store chain, is to halve its dividend after reporting a fall in full-year profit, but vowed to keep spending on new stores in spite of a £1bn debt pile.

The retailer’s share price has been savaged in the past few months as investors take flight from leveraged companies. Announcing annual results on Tuesday, Debenhams said the issue of its £994m debt was being “addressed” by cost savings and gross margin gains.