Home Retail Group news
Interim Results 2006
21 November 2006
Home Retail Group, the UK’s leading home and general merchandise retailer, today announces its Interim Results for the six months ended 30 September 2006. These results reflect the fact that it was wholly owned by its former parent company, GUS plc, throughout the period under review and continued to be so until the demerger became effective on 10 October 2006. These results are not therefore representative of the capital structure that Home Retail Group operated under from the date the demerger occurred. Certain pro forma information has been provided to illustrate the effect of the demerger on Home Retail Group.
Group operating highlights
- Strong growth in consumer electronics, furniture and kitchens
- Capitalising on extensive product portfolio and market leadership; Extension of Argos “Home” catalogue and Homebase “big book of home furnishings” trials
- Further supply chain benefits delivered through the leverage of group scale
- Increased customer reach with 31 new stores opened across the Group
- Multi-channel leadership enhancing growth; Argos Internet orders now representing 15% of its total sales; multi-channel skills being leveraged to support the Homebase proposition
Financial highlights
- Sales up 8% to £2,820m (2005: £2,618m)
- Benchmark operating profit1 up 2% to £106.9m (2005: £105.3m); reported operating profit of £90.5m
- Pro forma benchmark profit before tax2 of £112.6m; reported profit before tax of £66.2m
- Pro forma basic benchmark earnings per share3 of 8.7p; reported basic earnings per share of 4.8p
- Interim dividend of 4.0p per Home Retail Group share
Oliver Stocken, Chairman of Home Retail Group, commented:
“We are delighted that our successful demerger has created the opportunity for investors to invest directly in what we believe is an extremely well-positioned and focused business. In particular, I would like to welcome some 30,000 employees as new shareholders in their business.”
Terry Duddy, Chief Executive Officer of Home Retail Group, commented:
“Home Retail Group has delivered a good performance in the first half against a backdrop of challenging conditions in some of our markets. While we remain cautious on the short-term outlook for UK consumer spending, we will continue to drive our businesses forward for long-term growth. We have set out a clear strategy to achieve this, including leveraging the strength and breadth of our product offering and our unique multi-channel skills.”
1. Benchmark operating profit is defined as operating profit before amortisation of acquisition intangibles, store impairment charges, exceptional items and costs related to demerger incentive schemes.
2. Benchmark profit before tax (“PBT”) is defined as profit before amortisation of acquisition intangibles, store impairment charges, exceptional items, costs related to demerger incentive schemes, financing fair value remeasurements, financing impact on retirement benefit balances and attributable taxation. It includes Home Retail Group’s share of post-tax results of associates.
Pro forma benchmark PBT for the six months ended 30 September 2006 is also presented to illustrate the impact on the Group’s financial performance as if the demerger capital structure had existed from 1 April 2006.
3. Basic benchmark earnings per share (“EPS”) is defined as Benchmark PBT less taxation attributable to Benchmark PBT, divided by the number of shares in issue at the date of demerger (excluding Home Retail Group shares that will be held in its Employee Share Ownership Trust (“ESOT”)).
Pro forma benchmark EPS for the six months ended 30 September 2006 is also presented to illustrate the impact on the Group’s financial performance as if the demerger capital structure had existed from 1 April 2006.
Enquiries
| Analysts and investors (Home Retail Group) | ||
|---|---|---|
| Richard Ashton | Finance Director | 01908 600 291 |
| Stuart Ford | Head of Investor Relations | |
| Press (Finsbury) | ||
| Rupert Younger | 020 7251 3801 | |
| Rollo Head | ||
There will be a presentation today at 8.30am to analysts and investors at King Edward Hall, Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ. The presentation can be viewed live on the Home Retail Group website www.homeretailgroup.com. The supporting slides and an indexed replay will also be available on the website later in the day.
Home Retail Group’s Third Quarter Trading Update will be on 17 January 2007.
Certain statements made in this announcement 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.
