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Positive end to good year for Homebase and Argos

Published: 13 March 2014
Homebase and Argos parent Home Retail Group (HRG) said today in a trading statement that it expects full-year profit to be better than expected, after an encouraging final two months.
Positive end to good year for Homebase and Argos
In the eight-week trading period for the year ending March 1 2014, total sales at Homebase were up 6.9%, and 9.3% on a like-for-like basis. For the full year the rises were 4.1% and 5.9%, delivering a total of £1,489m of sales.

HRG said that the upturn in sales had been driven by further growth in big-ticket sales, as well as growth across the remaining product categories.

Homebase has been closing stores for some time now, and net closed space reduced sales by 2.4% during the period. There were no closures over that time, but the retailer has cut its store portfolio by 13 stores in the current financial year to 323.

At Argos the final eight weeks of trading saw total and like-for-like sales both up by 5.2%. The full-year rises were 3.0% and 3.3% respectively, pushing sales for the whole year to £4,051m.

HRG said that electrical products continued to deliver a positive sales performance at Argos, with growth in small domestic appliances as well as video gaming, televisions and white goods. Sales across the remaining product categories were broadly flat.

Internet sales for the full year now represent 44% of total Argos sales, up from 42% for the same period last year. Within this, mobile commerce sales grew by 89%, delivering 18% of total Argos sales.

In the current financial year Argos trades from 734 stores, having closed four during the last two months.

Commenting on the results, HRG chief executive Terry Duddy said: "The positive sales performance in the last few weeks of our financial year concludes a good year for both Argos and Homebase, with both businesses having delivered like-for-like sales growth throughout the year.

"As a result of this recent trading performance, we now expect group benchmark profit before tax to be slightly ahead of the top end of the current range of market expectations of £107m to £111m.

"It has been a very exciting time leading the group over the last 15 years. Digital technology, together with changes in consumer behaviour, have fundamentally changed the face of retailing in recent times, and both Argos and Homebase have well-defined plans and strong management teams in place to be leaders in both digital trends and changes in the way people shop."

However, he warned: "Although there are signs that economic conditions may be beginning to improve, we will continue to plan for a subdued consumer environment."

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