The Home Retail Group has announced its full-year results for the 52 weeks to 28th February 2015, highlighting a "good overall performance, with a second year of like-for-like sales growth at both Argos and Homebase".
Sales increased by 1% to £5710m, with like-for-like sales up 0.6% at Argos, and up 2.3% at Homebase. Cash gross margin remained broadly flat at £2037m, and benchmark profit before tax increased by 14% to £1321m.
Argos' transformation plan continues, the national roll-out of the new hub & spoke distribution network, enabling same-day collection of around 20,000 products, now complete. With 60 digital stores now trading across three different store formats, internet penetration accounted for 46% of total sales, including mobile commerce which grew by 38% to represent 25% of total sales. A further c.11,000 products and 29 brands were added to the portfolio.
Following a comprehensive review and the launch of a new productivity plan in October, the number of Homebase stores has been reduced by 27 to 296, with the aim of better cash generation. Argos concessions now occupy 20 stores, and Habitat concessions 35 stores.
John Coombe, chairman of Home Retail Group, comments: “The group has completed another year of good financial performance, delivering both like-for-like sales and profit growth, together with a strong year-end cash balance of over £300m. Our focus on managing costs and gross margin together with our ongoing cash management were all critical in delivering this good overall financial performance. We are recommending an increase of 15% to the full-year dividend.”
John Walden, chief executive, adds: "The group performed well in FY15 and ahead of consensus profit expectations, achieving 14% growth in benchmark profit before tax and 25% growth in benchmark EPS. Both Argos and Homebase contributed positive like-for-like sales and profit growth for the second successive year. I believe the strategic plans we are pursuing across the Group will enable us to innovate and lead in a rapidly-changing retail market."