Financial performance


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



Overview


Operating highlights

  • 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

Financial highlights

  • 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

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