Published on 29 - April - 2009
Home Retail Group reports £394m lossGroup's full-year results reveal plans for further Homebase store closures as the company states it "cannot be immune from the economic backdrop".
Home Retail Group's results for the 52 weeks to February 2, 2009 revealed a pre-tax loss of £394.2m compared with a profit of £432.9m last year. Total sales for the group saw a 1% drop to £5,897m.
The report also showed that like-for-like sales were down 10.2% at Homebase, citing "challenging market conditions in virtually all product categories".
Particular weakness was reported in seasonally-related categories, however, kitchens and energy efficient products continued to grow.
The Group's operational review stated that ongoing management of its Homebase store portfolio "is likely to see a limited number of store closures each year", resulting in a sales contribution from net new space of less than 1%.
The DIY chain also plans to restructure supervisory positions, reducing store-based full-time jobs by approximately 5%. Homebase has already cut 15% of the workforce at its Milton Keynes head office.
Like-for-like sales were down 4.8% at Argos. The weakest areas throughout the year for the general merchandise retailer were furniture and homewares, as well as seasonal categories in the early months of the year.
Home Retail Group chairman Oliver Stocken said of the results: "This has been a challenging year for the UK retail industry. While profit performance in the short term cannot be immune from the economic backdrop, the Group's underlying strengths will secure our continued longer-term success."
Argos' gross margin was down around 100 basis points, largely reflecting a change in sales mix, according to the report, while Homebase achieved an approximate 25 basis point increase as a result of "increased promotional and clearance activity".
Total dividend for the year was maintained at 14.7p, with a final dividend of 10.0p recommended by the board.
Home Retail Group chief executive Terry Duddy said: "Looking ahead we continue to expect a difficult trading environment for the product markets in which we operate. We remain in a position of planning cautiously in respect of the outlook for consumer confidence in general and for the level of discretionary household spending."
He added that Home Retail Group, "will continue to pursue a strategy to further its competitive advantage."
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