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Debenhams is to step up its expansion overseas and online after lifting annual profits, though the retailer remains gloomy about UK consumer spending.

The department-store chain is to increase capital expenditure by 14 per cent to £135m this year, including spending on systems, modernising its UK stores and relocating the head office in London.

Michael Sharp, the chief executive, said: "It is about investing for future growth."

Debenhams, which has 71 franchise shops in 26 countries, intends to reach a total of 150 stores overseas, up from 130 previously, over the next five years. Mr Sharp said this reflected its "confidence in growing our international business", citing opportunities for extending its presence in the Middle East and Asia.

Debenhams also plans to deliver annual online sales of £600m by 2017, from the £500m previously forecast.

Pre-tax profits grew by 4.2 per cent to £158.3m over the year to 1 September, on total sales up 2.6 per cent to £2.7bn. It boasted market-share gains in womenswear and beauty.