Mixed fortunes at Home Retail

28th Apr 2010 07:07

Sales rose but underlying profits fell last year at Home Retail as weak consumer spending and higher product costs put pressure on margins at Argos, though Homebase staged a recovery.Sales overall rose 2% to £6.02bn in the year to end February, from £5.9bn, but discounts and promotions to get customers to buy took their toll on underlying profits, which fell to £293m from £328m. Pre-tax profits were also £293m against last year's one-off hit loss of £394m.Sales at Argos rose to £4.35bn from £4.28bn, though operating profits fell 12.5% to £266m. Like-for-like sales fell 2.1%. This year, approximately 130 stores will be refurbished to reflect a new brand identity as well as the latest shopping process improvements and product displays. This will cost £15m. Home Retail said.Homebase sales rose to £1.57bn from £1.51bn, with operating profits up to £41m from £15m. Like-for-like sales rose by 2.7% against a fall of 10.2% last time."The UK home and general merchandise market has experienced reduced levels of customer demand and industry-wide pressures on the cost of goods over the last year. On all measures, the group has produced a good result against this backdrop," chairman Oliver Stocken said. The dividend for the year is unchanged at 14.7p, though the group did announce plans for a £150m share buy-back.