Home Retail Group plc
Full-Year Results
Home Retail Group, the UK's leading home and general merchandise retailer, is required for the financial year just ended to report its audited financial results for the 53-week statutory period ended 3 March 2012. However, we believe that the proforma 52-week results better reflect the underlying performance of the Group and so all references to financial performance in respect of the income statement, cash flow and business reviews are stated on a proforma 52-week basis to 25 February 2012 unless specified otherwise.
Operating highlights
§ Ongoing investment initiatives in both businesses to maintain leadership in multi-channel retailing:
- Argos multi-channel sales penetration increased to 48% of total sales with online Check & Reserve still the fastest growing channel
- Argos is the second largest internet retailer in the UK with over 430 million site visits
- Argos mobile shopping has grown threefold to represent 6% of total sales by year-end
- Homebase multi-channel sales penetration increased to 4% of total sales
§ Ongoing development and growth in own-brand and exclusive product strategies in both businesses
§ Argos store refurbishment continues to deliver sales uplifts ahead of plan
§ Extension of Argos online product offering
§ Third consecutive year of market share gains at Homebase
§ Improved ranges across Homebase big ticket categories with award winning installation services
§ Acquired the exclusive use of the Habitat UK brand; introduction of Habitat product into both the Argos and Homebase businesses during 2012
Financial highlights
§ Sales down 6% to £5,492m
§ Cash gross margin down 7% to £2,027m
§ Robust management of costs with operating and distribution costs broadly flat at £1,930m, with the impact of both underlying cost inflation pressures and the investment in new initiatives having been offset by further cost savings
§ Benchmark operating profit1 down 61% to £98m; Group operating margin of 1.8%
§ Benchmark profit before tax2 down 60% to £102m
§ Basic benchmark earnings per share3 down 59% to 8.7p
§ Closing net cash position at 25 February 2012 of £181m
§ Full-year dividend of 4.7p; no final dividend recommended
§ For the 53 weeks to 3 March 2012, sales down 5% to £5,583m and benchmark profit before tax2 down 54% to £116m. Reported profit before tax of £104m. Reported basic earnings per share of 9.1p. Closing net cash position at 3 March 2012 of £194m. The 53rd week contributed £14m of additional benchmark profit before tax2 and £13m of additional cash.
Oliver Stocken, Chairman of Home Retail Group, commented:
"While the Group's performance in the short term cannot be immune from the economic environment, we continue to focus on its strategic advantages to ensure that it will be well positioned for the economic recovery over the long term. Against this economic backdrop, the Board has decided not to recommend a final dividend this year and therefore the full-year dividend is represented by the interim dividend of 4.7p. Future dividends will be set at a level which is sustainable and which reflects the trading prospects and financial position of the Group."
Terry Duddy, Chief Executive of Home Retail Group, added:
"In a particularly difficult trading environment, we have managed our costs and cash effectively. While we remain cautious about the consumer outlook over the short term, we are well positioned operationally and we will continue to prioritise investment in our leading multi-channel capabilities to shape the future of shopping for our customers, ensuring we bring unrivalled convenience and value to customers' everyday lives, whether shopping at home or on the move.
"I would also like to take this opportunity to welcome John Walden to the Home Retail Group management team as the new Managing Director for Argos. John brings with him a wealth of multi-channel retail and technology related business experience. Furthermore, I would like to thank our Chairman, Oliver Stocken, who retires from the Board at our Annual General Meeting in July, for his significant contribution to the Group over many years. I look forward to working with John Coombe as he steps up to his new role as the Group's Chairman."
