Operating highlights
Good performances at both Argos and Homebase, with both businesses delivering positive like-for-like sales growth throughout the year
Argos Transformation plan progress:
- Increased internet penetration to 44% of Argos' total sales, including mobile commerce which grew 89% to account for 18% of total sales
- Launched improved smartphone and tablet apps
- Achieved 11.6 million customer registrations
- Trialled 'hub & spoke' distribution model in 49 stores
- Added aspirational new brands to Argos range
- Trialled six digital concept stores
Homebase Renewal plan progress:
- Completed a further 12 store refits
- Launched a next day delivery proposition
- Grew multi-channel sales by 53%
- Reduced the store estate in line with plans
Financial highlights
Sales up 3% at £5,663m
Cash gross margin up 2% to £2,034m
Operating and distribution costs up £13m to £1,921m as a result of ongoing investment in strategic initiatives across both Argos and Homebase
Benchmark operating profit up 21% to £113.0m
Benchmark profit before tax up 27% to £115.4m
Basic benchmark earnings per share3 up 35% to 10.4p
Reported profit before tax of £71.2m; reported basic earnings per share of 6.8p
Year-end cash balance of £331m
Full-year dividend up 10% at 3.3p (FY13: 3.0p); final dividend of 2.3p recommended
John Coombe, Chairman of Home Retail Group, commented:
"The Group has delivered a good financial performance in the year and it has maintained its strong financial position with a year-end cash balance of £331m. The Board remains mindful of both the investment needs of the Group and the importance of the dividend to our shareholders and, after careful consideration, it is recommending a final dividend of 2.3 pence and thus a full-year dividend of 3.3 pence. This represents a 10% increase against the previous year.
"I would like to take this opportunity to pay tribute to Terry Duddy who, over the last 15 years, the last seven as Chief Executive of Home Retail Group, has contributed so much to the Group. We wish Terry every success for the future. I would also like to welcome John Walden, who has been running Argos for the last two years, to the Board as our new Chief Executive."
John Walden, Chief Executive of Home Retail Group, added:
"The Group has delivered a good performance in what remained a challenging market. Both retail businesses recorded positive like-for-like sales for all four reporting periods, resulting in 27% growth in Group benchmark profit before tax. We also made good progress with our strategic plans in both businesses, which will become increasingly important in a competitive retail environment where shopping behaviours are changing rapidly."
