Interim Management Statement

RNS Number : 3828Z

Home Retail Group Plc

13 January 2011

 



13 January 2011

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 29 August 2010 to Saturday 1 January 2011.

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

"Argos has performed in line with our original expectations for its peak period, despite some particularly challenging and volatile trading conditions in the build-up to Christmas.  Homebase has again traded well in what is for them a less seasonally important selling period.  We now expect Group benchmark PBT for the year to be around the mid-point of our previously guided range of £250 -275m."

		Latest period (18 weeks to 1 January)		Year-to-date (44 weeks to 1 January)
Argos
Sales		£1,861m		£3,674m
Like-for-like change in sales		(4.9%)		(5.7%)
Net space contribution to sales change		1.7%		2.1%
Total sales change		(3.2%)		(3.6%)
Gross margin movement		Down c.25bps		Down c.75bps
Homebase
Sales		£487m		£1,342m
Like-for-like change in sales		(1.2%)		(1.0%)
Net space contribution to sales change		(1.6%)		(0.8%)
Total sales change		(2.8%)		(1.8%)
Gross margin movement		Up c.75bps		Down c.25bps

Argos

Total sales at Argos declined by 3.2% to £1,861m.  Net new space contributed 1.7%; six new stores opened and one closed in the quarter, taking the portfolio to 754; two stores were relocated.

Like-for-like sales declined by 4.9% in the period.  In difficult markets, video gaming continued to be the most challenging category and televisions were down against last year's good performance.  The jewellery category was also weak.  There was an excellent performance in laptops and tablets, as well as further good growth in white goods and toys.

The internet represented over £700m or 38% of Argos sales, up from 35% a year earlier; online reservations accounted for over three-quarters of these sales.  The Argos application for Apple devices has now been downloaded 1.2 million times and was used to place almost a million reservations in the period.

The approximate 25 basis point gross margin decline was driven principally by increased clearance activity.

Homebase

Total sales at Homebase declined by 2.8% to £487m.  Net closed space reduced sales by 1.6%; four stores closed in the quarter, reducing the portfolio to 341.

Like-for-like sales declined by 1.2% in the period.  'Big ticket' sales were ahead, while sales for the remaining categories saw modest declines.

The approximate 75 basis point gross margin increase was driven principally by reduced promotional activity.

Financial position

A share buy-back programme of up to £150m over the following 12 months was announced on 28 April 2010.  To date, 58,812,500 shares have been purchased at an average price of 234p and a net cash cost of £139m.  The purchased shares represent 6.7% of the 877,445,001 issued ordinary shares at the 27 February 2010 balance sheet date.

No other material events, transactions or impacts on the Group's strong financial position have taken place since the previously announced 28 August 2010 balance sheet date.

Enquiries

Analysts and investors (Home Retail Group)

Richard Ashton                          Finance Director                         01908 600 291

Stuart Ford                               Director 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 8.45am 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 (2 January 2011 to 26 February 2011) on Thursday 10 March 2011, and its full-year results on Wednesday 20 April 2011.

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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