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Home Retail Group reflects on 'good overall performance' and increases dividend

Homebase Sheffield

Home Retail Group, the UK’s leading home and general merchandise retailer, has announced its results for the 52 weeks to 28 February 2015.

Operating highlights:
-A good overall performance, with a second year of like-for-like sales growth at both Argos and Homebase.

Argos Transformation Plan progress:
- Completed the national roll-out of the ‘hub & spoke’ distribution network enabling same day collection of c.20,000 products
- 60 digital stores now trading across three different store formats
- Internet penetration accounted for 46% of total sales including mobile commerce which grew by 38% to represent 25% of total sales
- Added a further c.11,000 products and 29 aspirational brands

Homebase Productivity Plan progress:
- Completed a comprehensive review of the Homebase business, and announced the Productivity Plan in October 2014
- Good progress achieved in reducing the size of the store estate by 27 stores to 296 stores in a cash generative manner
- Argos concessions now in 20 stores and Habitat concessions in 35 stores

Financial highlights:
-Sales increased by 1% to £5,710m; like-for-like sales up 0.6% at Argos, and up 2.3% at Homebase
- Cash gross margin broadly flat at £2,037m
- Operating and distribution costs decreased by £14m to £1,908m
- Benchmark profit before tax increased by 14% to £132.1m
- Basic benchmark earnings per share increased by 25% to 13.0p
- Reported profit before tax increased by 32% to £93.8m; reported basic earnings per share of 9.4p
- Year-end cash balance of £309m
- Full-year dividend up 15% at 3.8p (FY14: 3.3p); final dividend of 2.8p recommended

John Coombe, Chairman of Home Retail Group, commented:

“The Group has completed another year of good financial performance, delivering both like for-like sales and profit growth, together with a strong year-end cash balance of over £300m. Our focus on managing costs and gross margin together with our ongoing cash management were all critical in delivering this good overall financial performance. We are recommending an increase of 15% to the full-year dividend.”

John Walden, Chief Executive of Home Retail Group, added:

"The Group performed well in FY15 and ahead of consensus profit expectations, achieving 14% growth in benchmark profit before tax and 25% growth in benchmark EPS. Both Argos and Homebase contributed positive like-for-like sales and profit growth for the second successive year. I believe the strategic plans we are pursuing across the Group will enable us to innovate and lead in a rapidly changing retail market."

See the full publication here.

Source : Home Retail Group

29 April 2015

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