Home Retail profits rise

The firm, which is transforming its larger, more profitable Argos chain from a catalogue-based household goods retailer into a digitally-led business said underlying pretax profit for the year to February 28 rose to £132.1m, slightly ahead of a forecast of £130m.

Total sales grew by 1 percent to £5.7bn in the year with underlying sales at Argos up 0.6 per cent and by 2.3 per cent at its DIY chain Homebase, where a quarter of stores are being closed in response to weaker demand.

Home Retail, which hiked its full-year dividend by 15 per cent to 3.8 pence, said it anticipated an improvement in the second half of its new fiscal year, helped by new Argos digital offers in time for peak trading.

John Coombe, chairman of Home Retail, said: “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 per cent to the full-year dividend.”

John Walden, chief executive of Home Retail, added: “The Group performed well in FY15 and ahead of consensus profit expectations, achieving 14 per cent growth in benchmark profit before tax and 25 per cent 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.”