21st Oct 2015 07:29
LONDON (Alliance News) - Home Retail Group PLC Wednesday reported a rise in profit in the first half of its financial year, but said full-year benchmark pretax profit will be below the lower end of current guidance due to trading uncertainty and increased investment in its Fast Track collection and delivery service.
Shares in Home Retail plummeted 13.2% at 130.00 pence early Wednesday, making it the worst performer in the FTSE 250.
The owner of the Argos electronics and general merchandise chain and the Homebase DIY chain said pretax profit in the six months ended August 29 grew to GBP23.4 million from GBP13.5 million in the same period the year before, as it booked lower costs associated with exceptional items than in the prior year.
However, sales fell 2% to GBP2.63 billion from GBP2.68 billion, as Argos was hit by declines in both electrical and seasonal product categories, despite Homebase delivering like-for-like sales growth.
Home Retail maintained its interim dividend at 1.0 pence.
"We look forward to an improved sales performance for both Argos and the group in the second half. However, as I have previously stated, trading at Argos during this year's important Christmas season seems less predictable than usual, as both retailers and customers determine whether to repeat last year's unusual Black Friday patterns," Chief Executive John Walden said in a statement.
"The combination of this trading uncertainty, an increased level of investment in the launch of Fast Track and the underlying profit reduction from Argos' challenging first half, mean that at this stage of the financial year we expect the group's full-year benchmark profit before tax to be slightly below the bottom end of the current range of market expectations of GBP115 million to GBP140 million," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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