13th Mar 2014 09:37
LONDON (Alliance News) - Home Retail Group PLC saw its shares rise by 5% Thursday, after the home and general merchandise retailer reported strong like-for-like sales growth from both its Argos and Homebase chains for the financial year just ended.
Home Retail said it now expects group benchmark pretax profit to beat the top-end of current market expectations.
In a trading statement before its full-year results on April 30, Home Retail said that, after a strong finish to the year from its businesses, it now expects group benchmark profit before tax to be slightly ahead of the top end of the current range of market expectations of GBP107 million to GBP111 million.
Home Retail said that Argos, its warehouse retailer, and Homebase, its home-improvement products retailer, both delivered like-for-like sales growth throughout the financial year ended March 1.
Argos reported 5.2% like for like sales growth in the last eight weeks of the year, and reported total sales for the year of GBP4.05 billion, up 3% on last year, and 3.3% on a like-for-like basis, driven by strong sales for its electrical products. It said sales across the remaining product categories were broadly flat year-on-year, with the exception of jewellery which reported a slight decline.
It said for the full-year, online represented 44% of total Argos sales, of which 18% came from mobile commerce sales.
Home Retail said Homebase recorded 9.3% growth in like-for-like sales in the last eight weeks of the year, bringing sales for the year to a total of GBP1.49 billion, up 5.9% on the prior year, and 4.1% on a like-for-like basis, driven by further growth in big ticket sales and expensive items.
Home Retail closed four Argos stores closed in the last eight weeks of the year, bringing its store portfolio in the current financial year to 734. The group closed 13 Homebase stores during the year, bringing its store portfolio to 323 stores.
Home Retail said both business saw gross margins decline during the year, with Argos down 50 basis points for the year, and Homebase gross margin down 100 basis points.
"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," said Chief Executive Terry Duddy in a statement.
Home Retail shares were amongst the biggest gainers Thursday morning, trading 5.1% higher at 215.50 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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