Financial highlights
Sales increased by 3% to £2,669m; like-for-like sales up 2.9% at Argos, and up 4.1% at Homebase
Cash gross margin increased by 2% to £981m
Operating and distribution costs increased by £15m to £951m
Benchmark profit before tax increased by 13% to £30.9m
Basic benchmark earnings per share increased by 20% to 3.0p
Reported profit before tax decreased by 5% to £13.5m; reported basic earnings per share of 1.2p
Cash generation in the period of £2m with closing net cash of £333m
Interim dividend of 1.0p (2013: 1.0p)
John Walden, Chief Executive of Home Retail Group, said:
"The Group has performed well in the first half of the year, delivering further like-for-like sales growth at both Argos and Homebase and a 13% increase in Group benchmark profit before tax.
"Argos continued to build on its sales growth from the previous financial year, increased its benchmark operating profit whilst also making good progress with its Transformation Plan. Homebase delivered a good peak trading period, performing well throughout the half despite being up against the tough comparators of a strong second quarter last year. At this mid-way point in our financial year, we continue to expect to deliver full-year benchmark profit before tax in line with current market expectations, however, as always the full-year outcome will depend upon the important Argos Christmas trading period.
"In April I set out my near term priorities for the Group, which included undertaking a comprehensive review of Group strategy and its priorities going forward, in particular as they relate to Homebase. I have completed this review, which encompassed a range of market, strategic and operational factors.
"The successful delivery of the Argos Transformation Plan over its remaining three years continues to be the Group's strategic priority and its greatest potential source of shareholder value. Homebase is a good business with the basis for future growth. In this context, Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos' investments. This will position Homebase as a smaller but stronger business, ready for investment and growth."
