Terry Duddy, Chief Executive of Home Retail Group, commented:
"With trends in this short, low volume, trading period being broadly as we anticipated, Group benchmark profit before tax for the 52-week period ended 25 February 2012 is expected to be in-line with current market expectations. Whilst we begin the new financial year in good operational shape, we will continue to manage robustly both the cost base and the cash position of the Group, while prioritising investment in the ongoing development of our multi-channel capabilities."
Argos
Total sales at Argos declined by 7.7% to £480m in the period. Net new space contributed 0.8%; one new store opened and 12 stores closed reducing the store portfolio to 748. Like-for-like sales declined by 8.5% in the period, principally driven by the continued weakness in the consumer electronics market. Total internet sales grew slightly with internet penetration remaining strong at 40% of Argos' total sales, up from 36% a year ago.
The gross margin rate was flat.
Homebase
Total sales at Homebase declined by 6.2% to £195m in the period. Net new space contributed 0.3%; there was one store closure reducing the store portfolio to 341. Like-for-like sales declined by 6.5% in the period, principally driven by the continued weakness in big ticket sales.
The approximate 175 basis point gross margin improvement was driven mainly by stock management benefits.
Other
The Group's net cash position at 25 February 2012 is expected to be approximately £180m following a cash outflow for the 52-week period ended 25 February 2012 of approximately £80m.
As stated above, the financial year just ended requires the Group to report on a statutory 53-week period basis. The 53rd week to 3 March 2012, is expected to contribute approximately £15m of additional benchmark profit before tax and approximately £15m of additional cash. Both these amounts are in addition to the 52-week period financial performance referred to above and therefore, the Group's net cash position at 3 March 2012 is expected to be approximately £195m.
