17th Jan 2008 07:01
Home Retail Group Plc17 January 2008 17 January 2008 Home Retail Group plc Interim Management Statement Home Retail Group, the UK's leading home and general merchandise retailer, todaypublishes an Interim Management Statement covering the 18 weeks of 2 September2007 to 5 January 2008. Terry Duddy, Chief Executive of Home Retail Group, commented: "The overall results for this important period are in line with our expectationsand we are on target for full year profit to be towards the upper end of marketforecasts. Argos' broad product mix, strong value credentials and multi-channelleadership have shown clear strength over its peak trading period. Lookingforward, the anticipated consumer slowdown is now more evident and it is obviousthat sales growth in the short-term will be harder to come by. Despite facingthis increasingly challenging environment, we continue to believe that ourbusinesses are well positioned in their markets." Latest YTD 18 weeks to 44 weeks to 5 January 5 JanuaryArgosSales £1,919m £3,755mLike-for-like change in sales (0.2%) 0.6%Net new space contribution to sales change 2.7% 2.9%Total sales change 2.5% 3.5%Gross margin movement c.0bps Up c.50bps HomebaseSales £498m £1,352mLike-for-like change in sales (6.3%) (3.9%)Net new space contribution to sales change 2.2% 2.2%Total sales change (4.1%) (1.7%)Gross margin movement Up c.200bps Up c.250bps ArgosTotal sales at Argos grew by 2.5% to £1,919m in the 18 weeks to 5 January 2008.Like-for-like sales were down 0.2%, while the positive contribution to salesgrowth from net new space was 2.7%; a further seventeen new stores were addedand two were closed, taking the portfolio to 700. The overall sales growth was led by exceptional performances in the videogaming, 'satnav' and mobile phone categories. Strong growth continued in flatpanel TVs, while cameras and digital photo frames were also strong categories.Sales were marginally negative in the more traditional gift areas of toys andjewellery, while the furniture and homewares categories also became moredifficult. There was continued weakness in demand for older technology areassuch as the audio, VCR/DVD and landline phone categories. The Internet as an order channel grew by one-third to account for 23% of allArgos' sales. Internet 'Check & Reserve' orders for store collection accountedfor 15% of the 23%, growing by almost 50% and seeing nearly seven millionreservations collected over the period. Internet orders for home deliveryrepresented the other 8% of total Internet sales. Gross margin was approximately flat against the same period last year. Ongoingsupply chain progress, together with foreign exchange benefits, offset anincreased level of investment in lower prices in the catalogue and a negativeproduct mix impact. There was also excellent cost productivity in the period,albeit at a slightly lower rate than that achieved in the first half. The new Argos catalogue launches this Saturday, 19 January. Similar to theedition just ending it will have around 18,500 lines, representing an increaseof around 1,800 year-on-year. There are 10,400 lines available for immediatecollection in virtually all 700 stores, while half the store portfolio willcarry all or part of the additional 3,700 'Extra' lines. There will be anoverall price reduction on reincluded lines of approximately 4%, furtherenhancing excellent customer value. HomebaseTotal sales at Homebase declined by 4.1% to £498m in the period. Like-for-likesales were down 6.3%. The positive contribution to sales growth from net newspace was 2.2%; a further nine new stores were added and two were closed; inaddition, two of the 27 stores acquired from Focus were launched at the very endof the period; the store portfolio as at 5 January 2008 was 320. The level of overall sales decline was fairly consistent across the businesswith the exception of the 'big ticket' category which saw overall positivegrowth. The performance of this category was driven by continued strong growthin kitchens, although sales of bathrooms saw a decline and furniture sales alsobecame more difficult. Gross margin increased by approximately 200 basis points. This was a result ofongoing supply chain progress, together with foreign exchange benefits. OtherThere have been no significant changes in the financial position of the Groupsince the publication of the half-year results. As previously announced, post the half-year balance sheet date a cash payment of£40m was made to purchase 27 Focus DIY leasehold properties. Also in the secondhalf of the financial year, the Group has disposed of its 33% holding in AAGUS,a consumer finance company in The Netherlands. The sale for a net considerationof approximately £4m will result in a gain on disposal of approximately £3m,which will be recognised within the share of post-tax results of associateswithin benchmark PBT. Enquiries Analysts and investors (Home Retail Group)Richard Ashton Finance Director 01908 600 291Stuart Ford Head of Investor Relations Media (Finsbury)Rollo Head 020 7251 3801 There will be a conference call for analysts and investors to discuss thisstatement at 8.30am this morning. The call can be listened to live on the HomeRetail Group website www.homeretailgroup.com. An indexed replay will also beavailable on the website later in the day. Home Retail Group will announce details of trading for the remaining 8 weeks ofthe current financial year (6 January 2008 to 1 March 2008) on Thursday13 March 2008, and its full-year results on Wednesday 30 April 2008. 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:
Home Reit