Home Retail Group

Financial performance

This section is based on the latest full year results announcement for the 52 weeks to 28 February 2009

Strength of the operating model and good cost control helped mitigate the impact of a difficult market environment
Continued cash management focus throughout the Group led to another strong cash performance
Group sourcing scale and supply chain initiatives continue to support competitive customer pricing
Ongoing developments to the customer offer, adapting to their changing needs in challenging times
The internet now generates more than a quarter of Argos’ sales, with continued transfer of skills to support the rapidly growing Homebase online offer
A net 23 Argos stores opened in the year, with Homebase opening a net 14 including the remaining nine stores previously acquired from Focus

Total sales down 1% to £5,897m (2008: £5,985m), with like-for-like sales down 4.8% at Argos and down 10.2% at Homebase
Group gross margin down 81 basis points, with an approximate 100 basis point reduction at Argos and an approximate 25 basis point increase at Homebase
Total operating costs and distribution costs total increase of 1%, with underlying inflation of approximately 3% being largely offset by cost reduction actions
Benchmark operating profit¹ down 25% to £300m (2008: £398m), with a decline of £73m or 19% at Argos and a decline of £30m or 67% at Homebase
Benchmark profit before tax² down 24% to £328m (2008: £433m)
Basic benchmark earnings per share³ down 24% to 25.9p (2008: 33.9p)
Reported operating loss of £402m after exceptional charges of £694m, the majority being Homebase non-cash asset write downs and onerous lease charges
Reported loss before tax of £394m; reported basic loss per share of 47.7p
Cash generation of £110m; closing financing net cash position of £284m
Benchmark pre-tax return on invested capital⁴ of 12.0%
Final dividend of 10.0p recommended; full-year dividend held at 14.7p