Home Retail Group reports LFL growth for Homebase and Argos

Home Retail Group, the UK’s leading home and general merchandise retailer, announces details of the final eight-week trading period for the financial year ended 1 March 2014.

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Homebase:

Total sales at Homebase grew by 6.9% to £203m. Net closed space reduced sales by 2.4% in the period; there were no further store closures in the period, resulting in a reduction in the store portfolio of 13 stores in the current financial year to 323.

Like-for-like sales increased by 9.3% in the period driven by further growth in big ticket sales as well as growth across the remaining product categories.

The approximate 75 basis point gross margin decline was driven principally by the sales mix impact from the growth in big ticket products.

Argos:

Total sales at Argos grew by 5.2% to £526m. Net closed space had no material impact on sales in the period; four stores closed in the period resulting in a net reduction in the store portfolio of 3 stores in the current financial year to 734.

Like-for-like sales increased by 5.2% in the period. Electrical products continued to deliver a positive sales performance, principally as a result of sales growth in video gaming, TVs, small domestic appliances and white goods. Sales across the remaining product categories were broadly flat year on year with the exception of jewellery which experienced a small decline.

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

Terry Duddy, Chief Executive of Home Retail Group, commented:

“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. The cash outflow for the year will also be slightly better than previous guidance, resulting in a closing net cash position of around £330m.

“We have made good progress with the investment plans in both businesses during the current financial year and we have a clear agenda for growth. However, although there are signs that economic conditions may be beginning to improve, we will continue to plan for a subdued consumer environment.

“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. I would like to thank our 50,000 colleagues for their huge commitment and support.”

Source : Home Retail Group
www.homeretailgroup.com