Interim Management Statement

RNS Number : 5234F

Home Retail Group Plc

14 January 2010

 

14 January 2010

Home Retail Group plc

Interim Management Statement

Home Retail Group, the UK's leading home and general merchandise retailer, today publishes an Interim Management Statement for the 18 weeks from Sunday 30 August 2009 to Saturday 2 January 2010.

Terry Duddy, Chief Executive of Home Retail Group, commented:

"Argos has performed ahead of our plans in its most important trading period, and Homebase trading has continued to be strong. There was also further excellent cost management across both businesses. We now expect Group benchmark profit before tax for this financial year to be about £20m ahead of the current market consensus of £265m.

"Due to the uncertain economic outlook, we expect trading for the next financial year to remain challenging.  We will plan accordingly from a position of continued operational and financial strength."

	Latest period (18 weeks to 2 January)		Year-to-date (44 weeks to 2 January)
Argos
Sales	£1,922m		£3,810m
Like-for-like change in sales	0.1%		(1.0%)
Net new space contribution to sales change	3.8%		3.8%
Total sales change	3.9%		2.8%
Gross margin movement	Down c.250bps		Down c.175bps
Homebase
Sales	£501m		£1,367m
Like-for-like change in sales	4.0%		3.2%
Net new space contribution to sales change	0.6%		1.3%
Total sales change	4.6%		4.5%
Gross margin movement	Down c. 375bps		Down c.350bps

Argos

Total sales at Argos grew by 3.9% to £1,922m. Net new space contributed 3.8%; a net five new stores opened in the quarter, taking the portfolio to 744.

Like-for-like sales increased by 0.1% in the period. There was an excellent performance in toys, as well as good growth in televisions, personal computers and white goods. Growth in these areas was substantially offset by the market weakness in video gaming, while jewellery was also marginally down. The trend in furniture and homewares has continued to improve, being only marginally negative in the period.

The internet represented 35% of Argos sales, up from 30% a year earlier.  Three-quarters of these sales were online Check & Reserve orders, which grew by 34%.

The approximate 250 basis point gross margin decline was driven principally by the anticipated net impact of adverse currency movements, together with the sales mix impact and increased promotional activity.

The Argos Spring/Summer 2010 catalogue will launch on 23 January 2010; this is one week later than the previous year as a result of the calendar effect.

Homebase

Total sales at Homebase grew by 4.6% to £501m. Net new space contributed 0.6%; there was one opening and two closures in the period, reducing the portfolio to 349.

Like-for-like sales increased by 4.0% in the period.  Growth was again led by big ticket areas, particularly kitchens, and nearly all other product categories saw positive growth.

The approximate 375 basis point gross margin decline was driven principally by the anticipated net impact of adverse currency movements, together with increased promotional activity.

Financial position

No material events, transactions or other impacts on the Group's strong financial position have taken place since the previously announced 29 August 2009 balance sheet date.

Enquiries

Analysts and investors (Home Retail Group)

Richard Ashton	Finance Director		01908 600 291
Stuart Ford	Head of Investor Relations

Media (Finsbury)

Rollo Head

020 7251 3801

There will be a conference call for analysts and investors to discuss this statement at 8.30am this morning. The call can be listened to live on the Home Retail Group website www.homeretailgroup.com. An indexed replay will also be available on the website later in the day.

Home Retail Group will announce details of trading for the remaining eight weeks of the current financial year (3 January 2010 to 27 February 2010) on Thursday 11 March 2010, and its full-year results on Wednesday 28 April 2010.

Information in this announcement is based upon unaudited management accounts.  In addition, certain statements made are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.

 

END

 

 

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