Home Retail's profits rise on sales growth at Argos and Homebase

23rd Oct 2013 07:18

Home Retail Group's pre-tax profit in the first half rose 53 per cent to 27.4m pounds, driven by sales growth at its Argos and Homebase subsidiaries. In the six months to August 31st, sales climbed 3% to £2.5bn including a 2.3% increase in like-for-like sales at catalogue merchant Argos and a 5.9% jump at home improvement store Homebase.Argos recorded its fifth consecutive quarter of like-for-like sales growth, boosted by mobile commerce which now accounts for 16% of the retailer's total sales.Home Retail has invested in the transformation of Argos including the introduction of new smartphone and tablet apps, the launch of a digital Christmas gift guide and the development of digital concept stores.Homebase has recorded its best half of like-for-like sales performance since acquired by Home Retail in 2002.The subsidiary has completed five store refits, and plans to complete around 10 further refits in the current financial year. Group earnings per share increased 79% to 2.5p while operating profit rose 40% to £26.4m and the cash gross margin was up 1% to £962m. "As we look ahead to the second half of the year, we expect consumer spending will remain subdued, and whilst some macroeconomic indicators are improving, these have not yet led to an increase in household disposable income," said Chief Executive Terry Duddy. "Overall we are making good progress and are in excellent operational shape as we approach the key Christmas trading period." RD