Milton Keynes, UK, 2014-4-30 — /EPR Retail News/ — Home Retail Group, the UK’s leading home and general merchandise retailer, today announces its results for the 52 weeks to 1 March 2014.
OPERATING HIGHLIGHTS
- Good performances at both Argos and Homebase, with both businesses delivering positive like-for-like sales growth throughout the year
- Argos Transformation plan progress:
- Increased internet penetration to 44% of Argos’ total sales, including mobile commerce which grew 89% to account for 18% of total sales
- Launched improved smartphone and tablet apps
- Achieved 11.6 million customer registrations
- Trialled ‘hub & spoke’ distribution model in 49 stores
- Added aspirational new brands to Argos range
- Trialled six digital concept stores
- Homebase Renewal plan progress:
- Completed another 12 store refits
- Launched a next-day delivery proposition
- Grew multi-channel sales by 53%
- Reduced the store estate in line with plans
FINANCIAL HIGHLIGHTS
- Sales up 3% at £5,663m
- Cash gross margin up 2% to £2,034m
- Operating and distribution costs up £13m to £1,921m as a result of ongoing investment in strategic initiatives across both Argos and Homebase
- Benchmark operating profit1 up 21% to £113.0m
- Benchmark profit before tax2 up 27% to £115.4m
- Basic benchmark earnings per share3 up 35% to 10.4p
- Reported profit before tax of £71.2m; reported basic earnings per share of 6.8p
- Year-end cash balance of £331m
- Full-year dividend up 10% at 3.3p (FY13: 3.0p); final dividend of 2.3p recommended
John Coombe, Chairman of Home Retail Group, commented:
“The Group has delivered a good financial performance in the year and it has maintained its strong financial position with a year-end cash balance of £331m. The Board remains mindful of both the investment needs of the Group and the importance of the dividend to our shareholders and, after careful consideration, it is recommending a final dividend of 2.3 pence and thus a full-year dividend of 3.3 pence. This represents a 10% increase against the previous year.
“I would like to take this opportunity to pay tribute to Terry Duddy who, over the last 15 years, the last seven as Chief Executive of Home Retail Group, has contributed so much to the Group. We wish Terry every success for the future. I would also like to welcome John Walden, who has been running Argos for the last two years, to the Board as our new Chief Executive.”
John Walden, Chief Executive of Home Retail Group, added:
“The Group has delivered a good performance in what remained a challenging market. Both retail businesses recorded positive like-for-like sales for all four reporting periods, resulting in 27% growth in Group benchmark profit before tax. We also made good progress with our strategic plans in both businesses, which will become increasingly important in a competitive retail environment where shopping behaviours are changing rapidly.”
1 Benchmark operating profit is defined as operating profit before amortisation of acquisition intangibles, post-employment benefit scheme administration costs, store impairment and onerous lease charges or releases and costs or income associated with store closures and exceptional items.
2 Benchmark profit before tax (benchmark PBT) is defined as profit before amortisation of acquisition intangibles, post-employment benefit scheme administration costs, store impairment and onerous lease charges or releases and costs or income associated with store closures, exceptional items, financing fair value remeasurements, financing impact on post-employment benefit obligations, the discount unwind on non-benchmark items and taxation.
3 Basic benchmark earnings per share (benchmark EPS) is defined as benchmark PBT less taxation attributable to benchmark PBT, divided by the weighted average number of shares in issue (excluding shares held in Home Retail Group’s share trusts net of vested but unexercised share awards).
To view the announcement in PDF, click here.
To watch the webcast, click here.
To watch a video of Chief Executive, John Walden, discussing these results, click here.
Enquiries
Analysts and investors (Home Retail Group)
Richard Ashton Finance Director 01908 600 291
Mark Willis Director of Investor Relations
Media (RLM Finsbury)
Rollo Head 020 7251 3801
There will be a presentation today at 9.30am to analysts and investors at the King Edward Hall, Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ. The presentation can be viewed live on the Home Retail Group website www.homeretailgroup.com. The supporting slides and an indexed replay will also be available on the website later in the day.
An Interim Management Statement, covering the 13 weeks from 2 March 2014 to 31 May 2014, will be published on 12 June 2014.
Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.