14th Mar 2007 07:03
Home Retail Group Plc14 March 2007 14 March 2007 Home Retail Group plc End of Year Trading Statement Home Retail Group, the UK's leading home and general merchandise retailer, todayannounces details of the short trading period comprising the eight weeks to3 March 2007. Terry Duddy, Chief Executive Officer of Home Retail Group, said: "This short trading period to the end of our new financial year-end has seen aperformance ahead of our expectations. We now expect profits on a 52-weekpro forma basis to be slightly above the current market consensus, drivenprincipally by Argos. While we are pleased with the most recent performance andthe likely outturn for the financial year just completed, we remain cautious ona retail environment that is still expected to be challenging." % change in sales year-on-year Statutory 8 weeks 22 weeks year to 3 March to 3 March to 3 March* ArgosLike-for-like change in sales 3.0 0.9 2.3Net new space contribution to sales change 3.8 4.0 5.5Total sales change 6.8 4.9 7.8 HomebaseLike-for-like change in sales 9.9 1.2 (1.4)Net new space contribution to sales change 3.4 2.9 3.6Total sales change 13.3 4.1 2.2 * 1 April 2006 to 3 March 2007 for Argos and 1 March 2006 to 3 March 2007 forHomebase ArgosArgos grew its total sales by 6.8% in the final eight weeks of the financialyear. The like-for-like sales increase of 3.0% was driven by continued stronggrowth in televisions and video games systems. Total Internet sales grew by 37%,led by Check & Reserve, while home delivery grew to represent 24% of totalsales. Gross margin was slightly ahead versus the comparable period, driven byongoing supply chain initiatives and improved management of stock clearanceactivity; gross margin for the full year was in line with the prior year. The contribution to sales growth from net new space was 3.8%; the number ofstores at 3 March 2007 was 680, a net increase of 25 stores from 4 March 2006.As previously announced, Argos expects to open a similar number of stores in thecoming year. However, the contribution to sales growth will be lower than theyear just finished which benefited in the first half of the year from the 33acquired Index stores, as well as the larger total sales base. HomebaseIn what is the lowest volume trading period of the year and against the weakestcomparatives of the previous year, Homebase's total sales grew by 13.3% in thefinal eight weeks. Like-for-like growth was led by stronger performances in bigticket categories as well as good growth in garden maintenance. Gross margincontinued to be strongly ahead, driven by ongoing supply chain initiatives andimproved stock management. The contribution to sales growth from net new space was 3.4%; the number ofstores at 3 March 2007 was 310, a net increase of 13 stores from 4 March 2006.As previously announced, Homebase expects to open a similar number of stores inthe coming year. However, the contribution to sales growth is expected to besignificantly lower than the year just finished as a result of the plannedphasing and size of store openings. Year-end cash positionHome Retail Group now estimates that it will report a modest net cash positionas at 3 March 2007. This has been driven by the Group's improved profitperformance in the second half, delayed capital expenditure into the nextfinancial year and the timing of working capital flows in relation to the changeof year-end. Change of year-endAs previously announced, Home Retail Group has changed its year-end. The Groupwill this year report on a statutory basis the financial period ended 3 March2007. To assist with analysis and comparison, pro forma results for the 52 weeksto 3 March 2007 will also be provided as part of the Preliminary Results to beannounced on 2 May 2007. Today, as a separate announcement, we have provided details on the basis ofpreparation for the pro forma restatements, together with restated results forthe 26 weeks to 2 September 2006 and the 52 weeks to 4 March 2006. The timing oftrading statements will also change as a result of the new year-end; tradingstatement comparables on the new basis have also been provided in the separateannouncement. A summary of the restated pro forma results is as follows: H1 2006/07 pro forma results 6 months to Pro forma 26 weeks to£m 30 Sept 2006 Restatement 2 Sept 2006Sales 2,819.9 (163.5) 2,656.4Benchmark operating profit 106.9 (5.2) 101.7Net interest income 5.7 (0.2) 5.5Benchmark PBT 112.6 (5.4) 107.2Basic benchmark EPS 8.7p (0.4p) 8.3p FY 2005/06 pro forma results 12 months to Pro forma 52 weeks to£m 31 March 2006 restatement 4 March 2006Sales 5,548.0 (37.7) 5,510.3Benchmark operating profit 337.7 (5.9) 331.8Net interest income n/a 9.5 9.5Benchmark PBT n/a 3.6 337.1Basic benchmark EPS n/a n/a 25.6p Enquiries Analysts and investors (Home Retail Group)Richard Ashton Finance Director 01908 600 291Stuart Ford Head of Investor Relations Press (Finsbury)Rollo Head 020 7251 3801Alice Macandrew There will be a conference call for analysts and investors to discuss thistrading statement at 8.30am this morning. The call can be listened to live onthe Home Retail Group website www.homeretailgroup.com. An indexed replay willalso be available on the website later in the day. Information in this announcement is based upon unaudited management accounts. Inaddition, certain statements made are forward looking statements. Suchstatements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual events or results to differmaterially from any expected future events or results referred to in theseforward looking statements This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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