Homebase LFL sales up 5.9% in the first half of the year

The hot summer has turned around sales at Homebase, helping half-year profits at Home Retail Group to rise by 53 per cent.

The company, which also owns Argos , said today that garden furniture and barbecues sent sales up 5.9 per cent at Homebase - its best performance since its acquisition in 2002.

Sales at Argos were up by 2.3 per cent for the six months to August 31, as overall revenue increased by 3 per cent to £2.6 billion.

Home Retail, which said it was in good shape ahead of the key Christmas trading period, reported pre-tax profit of £27.4 million, slightly ahead of analysts’ forecasts.

After five consecutive years of falling profits, the retailer is revamping its Homebase stores and Argos from a catalogue to a digitally-led business, targeting a 15 per cent rise in sales to £4.5 billion by 2018.

Terry Duddy, chief executive, said that Argos posted its fifth consecutive quarter of like-for-like sales growth, with online sales continuing to increase. “The Argos transformation is well underway, including the introduction of new smartphone and tablet apps, the extension of the ‘hub & spoke’ trial, the launch of a digital Christmas gift guide and the development of digital concept stores,” he said.

Five Homebase stores have been refitted and a further ten will be completed this financial year.

“We expect consumer spending to remain subdued, and whilst some macroeconomic indicators are improving, these have not yet led to an increase in household disposable income,” Mr Duddy added.

Home Retail shares, which have risen by 68 per cent in the past 12 months, rose 3.1 per cent to 190p, valuing the company at £1.5 billion.

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Source : Chris Johnson - The Times
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