Home Retail Group, the parent company of Argos and previously Homebase, has posted a full year pre-tax loss of £804m following an £852m exceptional goodwill impairment charge that relates to Sainsbury’s’ acquisition of Argos.
Taking the charge away, annual operating profit declined 28% to £94.7m and sales across the group were down 1% to £5.6bn.
The exceptional impairment charge is in relation to Argos’s prior ownership under Great Universal Stores, which took over the business in 1998.
Home Retail Group was at the centre of attention for much of this year’s first quarter, being wooed by Steinhoff, Sainsbury’s and Wesfarmers.
“The past year has been a landmark period for the group, during which we have completed the sale of Homebase and recommended to shareholders the offer from Sainsbury for the acquisition of the remaining group, principally Argos,” said HRG CEO John Walden. “I am pleased that, with its offer for Home Retail Group, Sainsbury’s has recognised the good progress we have made in transforming Argos into a digital retail leader.
“During the year we continued to progress the Argos transformation plan, including the introduction of Fast Track, which offer market-leading propositions for both same-day home delivery and store collection. We have been encouraged by the customer response to Fast Track with our on-time delivery rates and customer satisfaction having continued to improve to leading levels.
“Argos also now has a proven digital store model, including small formats and concessions, which require lower capital outlay and provide customers with fast access to an expanded product range regardless of store stock capacity.
“Finally, the group ended the year with a cash balance of £623m, which is significantly stronger than previously anticipated. With leading digital capabilities, new Fast Track propositions, proven and flexible digital store formats and strong financial resources, we are well positioned for an exciting future.”
The group sold Homebase to Australian retail conglomerate Wesfarmers for £340m in January.