Japanese retailer Seven & I Holdings has posted a 51% drop in annual profits as declining consumption in its domestic market and charges related to its department store business hit earnings.

The company, which operates convenience stores, supermarkets and department stores, said that net profit for the year to 28 February sank to JPY44.88bn (US$481m), down from JPY92.34bn last year.

Revenue fell 9.5% to JPY5.11trn, while operating profit fell 29% to JPY226.67bn.

Nevertheless, the company indicated that it anticipates to book its first gain in four years in the fiscal ending February 2010, as it capitalises on improving store sales and cost cutting moves.

In the coming 12 months, Seven & I said that it expects its net profit to more than double to JPY100bn, with a 5.9% rise in operating profit and a 1.7% rise in revenue.