Home Retail posts 15% profit rise but warns on future
Argos and Homebase-owner Home Retail Group has reported a rise in pre-tax profit of 15 per cent to £433 million for the year, at the top end of analysts' expectations.
Sales were up 2.3 per cent to £6 billion in the year to March 1st 2008, with like-for-like sales up 0.7 per cent at Argos and down 4.1 per cent at Homebase.
DIY retailers have suffered from the slowing housing market and the credit crunch as consumers cut back on big-ticket sales.
Chairman of Home Retail Group Oliver Stocken said: "We are pleased to report another year of double-digit earnings growth. This is an excellent performance and is testament to the underlying strength of the group and the hard work of all our colleagues across the businesses."
The company said Argos had seen "record" profits over the year and Homebase had traded "relatively well in more difficult market conditions".
However, the company warned that the consumer environment is set to worsen and in the short term like-for-like sales will turn negative.
For the first quarter of this year, the group added that although Argos is trading in line with expectations, Homebase has started the year weaker than anticipated, as poor weather conditions this March and April contrast with very good weather conditions in the comparable months last year.
The Confederation of British Industry (CBI) warned yesterday retail sales fell again in April with big-ticket items suffering the largest declines.
The survey of UK retailers signals the weakest trade environment since November 2005 and is only expected to improve slightly in May.