‘Rather eventful period’ for Home Retail Group

Home Retail Group has announced details of the final eight-week trading period for the financial year ended February 27.

John Walden, chief executive of Home Retail Group, commented: “This has been another rather eventful period for the Group, during which we completed the sale of the Homebase business, and both J Sainsbury and Steinhoff International Holdings announced possible offers for the acquisition of the remaining Group.

He added: “I’m pleased with the continued improvement in Argos’ sales performance in the period.”

Total sales at Argos increased by 1.9% to £515m. Net new space contributed 3%, principally as a result of the 94 digital concessions and collection points that opened in the past year. The store estate increased by a net 90 stores to 845.

Like-for like sales declined by 1.1% in the period.However, the Group said that the cannibalisation impact on like-for-like sales as a result of the additional new space was around 1% and therefore, underlying like-for-like sales were broadly flat in the period.

Sales of non-electrical product categories grew, mainly due to the performance of furniture and general sports. But sales of electrical products declined, principally driven by video gaming, tablets and white goods, while mobiles continued to deliver ‘good levels’ of growth.

Internet sales grew by 13% in the period and represented 51% of total Argos sales, up from 46% for the same period last year. Within this, mobile commerce sales grew by 15% to represent 28% of total Argos sales, up from 25% in the prior year.

John Walden concluded: “We expect that Group benchmark profit before tax for the financial year ended February 27 will be in line with the current consensus of market expectations of £93m.

“We also expect that the Group’s year-end cash balance will be significantly stronger than previously anticipated at about £625m.”

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