Full-Year Results

Home Retail Group  |  Financial news

Home Retail Group, the UK's leading home and general merchandise retailer, is required for the financial year just ended to report its financial results for the 53-week statutory period ended 3 March 2012. However, we believe that the proforma 52-week results better reflect the underlying performance of the Group and so all references to financial performance in respect of the income statement, cash flow and business reviews are stated on a proforma 52-week basis to 25 February 2012 unless specified otherwise.

Operating highlights

Financial highlights

• Sales down 6% to £5,492m
• Cash gross margin down 7% to £2,027m
• Robust management of costs with operating and distribution costs broadly flat at £1,930m, with the impact of both underlying cost inflation pressures and the investment in new initiatives having been offset by further costs savings
• Benchmark operating profit¹ down 61% to £98m; Group operating margin of 1.8%
• Benchmark profit before tax² down 60% to £102m
• Basic benchmark earnings per share³ down 59% to 8.7p
• Closing net cash position at 25 February 2012 of £181m
• Full-year dividend of 4.7p, no final dividend recommended
• For the 53 weeks to 3 March 2012, sales down 5% to £5,583m and benchmark profit before tax² down 54% to £116m. Reported profit before tax of £104m. Reported basic earnings per share of 9.1p. Closing net cash position at 3 March 2012 of £194m. The 53rd week contributed £14m of additional benchmark profit before tax² and £13m of additional cash

Oliver Stocken, Chairman of Home Retail Group, commented:

"While the Group's performance in the short term cannot be immune from the economic environment, we continue to focus on its strategic advantages to ensure that it will be well positioned for the economic recovery over the long term. Against this economic backdrop, the Board has decided not to recommend a final dividend this year and therefore the full-year dividend is represented by the interim dividend of 4.7p. Future dividends will be set at a level which is sustainable and reflects the trading prospects and financial position of the Group."

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

"In a particularly difficult trading environment, we have managed our costs and cash effectively. While we remain cautious about the consumer outlook over the short term, we are well positioned operationally and we will continue to prioritise investment in our leading multi-channel capabilities to shape the future of shopping for our customers, ensuring we bring unrivalled convenience and value to customers' everyday lives, whether shopping at home or on the move.

"I would also like to take this opportunity to welcome John Walden to the Home Retail Group management team as the new Managing Director for Argos. John brings with him a wealth of multi-channel retail and technology related business experience. Furthermore, I would like to thank our Chairman, Oliver Stocken, who retires from the Board at our Annual General Meeting in July, for his significant contribution to the Group over many years. I look forward to working with John Coombe as he steps up to his new role as the Group's Chairman."

Notes

¹ Benchmark operating profit is defined as operating profit before amortisation of acquisition intangibles, store impairment and onerous lease charges or releases and exceptional items.
² Benchmark profit before tax (benchmark PBT) is defined as profit before amortisation of acquisition intangibles, store impairment and onerous lease charges or releases, exceptional items, financing fair value remeasurements, financing impact on retirement benefit obligations, the discount unwind on non-benchmark items and taxation.
³ Basic benchmark earnings per share (benchmark EPS) is defined as benchmark PBT less taxation attributable to benchmark PBT, divided by the weighted average number of shares in issue (excluding shares held in Home Retail Group's share trusts net of vested but unexercised share awards).

To view the announcement in PDF, click here.

To listen to the conference call, click here.

There will be a presentation today at 9.30am to analysts and investors. The presentation can be viewed live on the Home Retail Group website www.homeretailgroup.com
The supporting slides and indexed replay will also be available on the website later in the day.

An Interim Management Statement, covering the 13 weeks from 4 March 2012 to 2 June 2012, will be published on 19 June 2012.

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.

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