Operating highlights
Announced transformation plan which will reinvent Argos as a digital retail leader and reposition it from a catalogue-led to a digitally-led business
Announced plans to invest in Homebase store refits and accelerated multi-channel capability to deliver an enhanced customer proposition
Argos' multi-channel sales penetration increased to 51% of total sales. Internet sales grew 10% to reach 42% of Argos' total sales. Argos' website and app visits increased by 24% with mobile shopping now representing 10% of total sales
Homebase's multi-channel sales penetration increased to 5% of total sales with Reserve and Collect sales growing by 27% and website visits increasing by 23%
In a year of positive like-for-like sales growth, Argos returned to market share growth whilst Homebase, despite a difficult trading environment, delivered its fourth consecutive year of market share gains
Ongoing growth and development of both exclusive and own-brand products, including the introduction of Habitat product into both Argos and Homebase
Financial highlights
Sales broadly flat at £5,475m
Cash gross margin down 1% to £2,002m
Robust management of costs with operating and distribution costs reduced by a further £21m to £1,908m, as underlying cost inflation was more than offset by further cost savings
Benchmark operating profit2 up £6m at Argos and down £12m at Homebase
Benchmark profit before tax3 down 10% to £91m
Basic benchmark earnings per share4 down 11% to 7.7p
Reported profit before tax of £130m; reported basic earnings per share of 11.7p
Strong cash generation in the year of £202m, driven principally by a strong working capital performance, with a closing net cash position of £396m
Full-year dividend of 3.0p (2012: 4.7p); final dividend of 2.0p recommended
John Coombe, Chairman of Home Retail Group, commented:
"The Group delivered a solid sales performance and very strong cash generation despite subdued consumer spending. With the Group's strong balance sheet and clear strategies for both businesses, the Board is confident that it has the appropriate plans in place and is recommending a final dividend of 2 pence per share, which together with the interim dividend of 1 pence per share makes a full year dividend of 3 pence per share."
Terry Duddy, Chief Executive of Home Retail Group, added:
"This was an encouraging year with both businesses growing their market shares. Argos delivered like-for-like sales growth for the first time in five years and multi-channel sales broke through the 50% threshold. Our strong financial position enables Argos to deliver on its transformation plan to become a digital retail leader, and for Homebase to invest in the rollout of its new proposition."
