Home Retail Group profits up 13% in first half
Home Retail Group, the owner of Argos and Homebase, has reported a 13% increase in its first half pre-tax profits.
In the 26 weeks to 30 August, group benchmark profit before tax rose to £30.9 million from £27.4 million last year. Total sales increased by 3% to £2,669 million.
Home Retail Group chief executive John Walden said: “The group has performed well in the first half of the year, delivering further like-for-like sales growth at both Argos and Homebase and a 13% increase in group benchmark profit before tax.
“Argos continued to build on its sales growth from the previous financial year, increased its benchmark operating profit whilst also making good progress with its transformation plan.
Never Miss a Retail Update!“Homebase delivered a good peak trading period, performing well throughout the half despite being up against the tough comparators of a strong second quarter last year.”
At Argos like-for-like sales increased by 2.9% as the retailer made good progress with its transformation plan.
Highlights of the first half included the completion of a national roll-out of a ‘hub & spoke’ network to enable the same day collection of around 20,000 products, and the commencement of a roll-out of online payment and fast track collection in-store.
During the period, Argos converted 13 existing stores to a digital format and plans to convert a further 10 shops in the remainder of the financial year. It also began the trial of a new small format digital store with three stores in London, one in Liverpool, and a further two planned to open in London in the remainder of the financial year.
In addition, nine digital concessions opened within Homebase stores. Home Retail Group said internet penetration accounted for 43% of Argos total sales including mobile commerce which grew by 45% and accounted for 22% of total sales.
Looking at Homebase, like-for-like sales grew by 4.1% as Home Retail Group completed a comprehensive review of the business.
During the six month period Homebase refitted a further 11 trial stores, which included Habitat concessions and improvements to the DIY and home propositions. It also upgraded its website, grew multi-channel sales by 12%, and continued to exit underperforming stores and reduce the size of the store estate.
In line with its productivity plan, Homebase is now targeting a greater number of exits from its least productive stores. It is planning to shut 25% of its 323 stores by 2018 and will exit around 30 stores in the 2015 financial year.
Home Retail Group said it expects to report a benchmark profit in line with market expectations for the full year.
Walden said: “At this mid-way point in our financial year, we continue to expect to deliver full-year benchmark profit before tax in line with current market expectations, however, as always the full-year outcome will depend upon the important Argos Christmas trading period.”
