Wednesday, February 20, 2019

Homebase sale buoys Home Retail Group profits


It was a mixed year for Home Retail Group, as the sale of Homebase bolstered the cash-flow from an averagely performing Argos.

In the 8 Weeks to 27 February, like-for-like sales at Argos fell 1.1%, largely due to the poor sales of electricals. Home Retail Group insisted, however, that given the “cannibalisation” of new stores, like-for-like sales were, on average, flat across the year.

As electrical sales declined, those of furniture and sports goods grew during the period, while Mobiles “continued to deliver good levels of growth”.

Internet sales continued to grow during the period, rising by 13% to cover 51% of Argos‘ total sales. This is up 46% from the same period last year. Mobile commerce grew to represent 28% of total Argos sales, compared to 25% in the same period in 2015.

“I am pleased with the continued improvement in Argos‘ sales performance in the period, together with the continued progress in the Argos Transformation Plan to become a digital retail leader,” said John Walden, Boss of Home Retail Group.

“In October we introduced FastTrack – market leading propositions for same-day home delivery and store collection. Since its introduction, customer awareness of FastTrack has continued to grow and its operations are improving, with both on-time delivery rates and customer satisfaction now at leading levels.

Along with FastTrack, the combination of our now proven digital concession model, together with improvements in digital experiences have driven increases in both digital sales and digital participation.”

Like-for-like sales at Homebase rose 3.3% during the 8 week period and 5.2% over the year, though full year revenue decreased 3.1% to £1.43bn. The sale of Homebase to Wesfarmers left Home Retail in an underlying closing net cash position of £310m.