Home Retail Group raises expectations, despite challenges
11 March 2010 09:37
Home Retail Group has raised its expectations for annual profits, despite a slide in new year sales at Argos. The retailer said that profits were likely to be approximately £290 million in the year to Friday 27th, slightly ahead of current predictions in the City. Sales at the Argos chain rose 1.5% to £4.35 billion, including a 6.6% drop in the final eight weeks of the financial year as the heavy snow and a later launch of its spring catalogue caused same-store sales to fall 9.4%.
At Homebase, sales were flat at £205 million in the eight weeks to the end of February, down 0.6% on a like-for-like basis. For the full year, Homebase sales were up 3.9% at £1.57 billion. HRG has been battling the impact of the weak pound in the period, which has increased the costs of imported goods and affected margins.It has looked to offset the challenging trading conditions by keeping a tight control of costs. HRG also increased its profits guidance in January, when it added £20 million to forecasts.
Terry Duddy, chief executive of HRG, commented: "Group benchmark profit before tax for the year will be around £290 million, slightly ahead of current market expectations. This is a good outcome to a challenging year, and is combined with excellent cash generation. The final short trading period reported today saw volatile trading patterns, making it difficult to assess any changes in underlying consumer demand.
"For the new financial year, we continue to plan cautiously given the uncertain economic outlook, but do so from our position of operational and financial strength".
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