Half-Year Results

Home Retail Group  |  Financial news

Home Retail Group, the UK's leading home and general merchandise retailer, today announces its results for the 26 weeks to 28 August 2010.

Operating highlights

• A solid performance at Argos, given particularly challenging conditions for its core customers and in certain product categories
• Further increase in Homebase's market share, representing another good performance in its peak seasonal trading period
• Leadership in multi-channel convenience, driven by continuing strong growth in Check & Reserve and further investment initiatives in both businesses
• Operational standards maintained or improved, while further cost actions have delivered enhanced efficiency
• Increased investment plans progressing well, including Argos store refurbishments and the roll-out of further installation services at Homebase

Financial highlights

• Sales down 3% to £2,720m; like-for-like sales down 6.5% at Argos and 0.8% at Homebase
• Cash gross margin down 6% to £1,040m; gross margin rate down approximately 150 basis points at Argos and approximately 100 basis points at Homebase
• Operating and distribution costs reduced by £39m or 4% to £947m, with positive cost productivity achieved in both businesses
• Benchmark operating profit (1) down 23% to £93m, with a decline of £25m or 32% atArgosand £3m or 6% at Homebase; Group operating margin of 3.4%
• Benchmark profit before tax (2) down 23% to £95m
• Share buy-back of £109m year-to-date, representing 5% of issued ordinary share capital, which enhanced earnings per share by 2% in the period
• Basic benchmark earnings per share (3) down 21% to 7.7p
• Reported profit before tax of £103m; reported earnings per share of 8.8p
• Closing net cash position of £327m; cash generation of £22m pre buy-back
• Interim dividend maintained at 4.7p

To view the full announcement click here (pdf).

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