14th Jun 2007 07:01
Home Retail Group Plc14 June 2007 14 June 2007 Home Retail Group plc Interim Management Statement Home Retail Group, the UK's leading home and general merchandise retailer, istoday publishing its first Interim Management Statement as required by the FSA'sdisclosure and transparency rules. The statement relates to the first 13 weeksof the new financial year, representing the period 4 March 2007 to 2 June 2007. Terry Duddy, Chief Executive of Home Retail Group, commented: "We have had a strong start to the financial year in a highly competitivemarket. Homebase has seen good sales growth in its peak season to date, whileArgos achieved like-for-like sales growth against a highly successful periodlast year. Gains in gross margin were achieved in the quarter, with bothbusinesses benefiting from group sourcing. We remain cautious given theuncertain consumer outlook and our expectations for the full year are unchangedat this early stage." % change in sales year-on-year 13 weeks to 2 JuneArgosSales £893mLike-for-like change in sales 0.9%Net new space contribution to sales change 3.6%Total sales change 4.5%Gross margin movement Up c.150bps HomebaseSales £463mLike-for-like change in sales 2.7%Net new space contribution to sales change 2.5%Total sales change 5.2%Gross margin movement Up c.300bps ArgosTotal sales at Argos grew by 4.5% to £893m in the first 13 weeks of thefinancial year. The contribution to sales growth from net new space was 3.6%;three stores were added to reach 683 as at 2 June 2007. The like-for-like salesincrease of 0.9% was driven by further strong growth in flat panel TVs and videogames systems, with seasonal categories also seeing good performances. Weakercategories included audio, VCR/DVD and landline phones. Total Internet ordersgrew by 29% and represented 18% of total sales, around half of which werereserved for in-store collection. Home delivery overall grew to represent 25% oftotal sales. Gross margin was ahead by approximately 150 basis points, even after prices onreincluded lines were approximately 3% lower. The gross margin gain was drivenby ongoing supply chain initiatives and foreign exchange benefits. It isanticipated that there will be an even greater level of investment in lowerprices for customers during the peak trading period, which we expect will lessenthe gross margin gain for the full year. HomebaseTotal sales at Homebase grew by 5.2% to £463m. The contribution to sales growthfrom net new space was 2.5%; there were two store openings and one closureduring the period, taking the store portfolio to 311. The like-for-like growthwas 2.7% for the period overall, with strongly positive sales growth achieved inMarch and April that then reversed significantly in May. The performance in theearlier part of the period was driven by the benefit of warm weather on sales ofseasonal categories, with trading then becoming more difficult during the latterweeks of the period. Kitchen sales continued to have good growth. Gross margin increased approximately 300 basis points, driven by ongoing supplychain initiatives, foreign exchange benefits and a lower amount of clearanceactivity in seasonal categories. This level of gross margin gain is likely tolessen through the remainder of the year. 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 13 weeks of3 June 2007 to 1 September 2007 on Wednesday 12 September 2007, and its halfyear results on Wednesday 24 October 2007. 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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