Argos owner sees profits rise as turnaround push pays offWednesday 30 April 2014 09.10
Household goods retailer Home Retail Group posted a 27%rise in full-year profit as a digital push at its Argos chain and a revamp at Homebase start to bear fruit.
After tough trading during the economic downturn, in which underlying pretax profit shrank to £91m in fiscal 2013 from £433m five years before, the group began implementing a turnaround plan last year.
This was aimed at pushing Argos sales up 15% to £4.5 billion by 2018.
Argos, which makes around 70% of group revenue, is being reinvented from a catalogue firm to a digitally-led business, targeting higher sales from tablet computers and mobile phones and hoping to cash in on easy collection from its 734 stores.
The group is improving its order retrieval systems and speeding up collections and will also trial some Argos stores this year within Homebase home improvement outlets, where business is benefiting from Britain's improving housing market.
The company said today its underlying pre-tax profit for the year to March 1 rose to £115.4m, slightly ahead of analyst forecasts averaging £112m, on total sales up 3% to £5.7 billion.
Sales at Argos stores open for more than a year rose 3.3%, led by strong demand for TVs, games consoles and tablets, and grew 5.9% at Homebase, thanks to higher sales of big-ticket items like kitchens.
Internet sales for the full-year rose 2% to 44% of total Argos sales, led by 89% growth in thos emade via mobiles and tablets.
The group said it would pay a final dividend of 2.3 pence per share, raising its full-year payout by 10% to 3.3 pence.