Profit upgrade boosts shares in Home Retail

Marion Dakers
HOME Retail Group impressed the City yesterday with rising post-Christmas sales and an upgraded full-year profit forecast.

Argos posted a 5.2 per cent jump in like-for-like sales to £501m in the eight weeks to 2 March, which finance director Richard Ashton said was helped by “very strong double digit growth” in sales of tablet computers that more than offset weak trading in homewares.

A strong end to the period means Argos like-for-likes rose 2.1 per cent to £3.93bn in the financial year.

Online transactions made up 43 per cent of sales in the eight-week period, up from 40 per cent a year ago.

The rise was supported by mobile sales that more than doubled to make up 14 per cent of takings, Ashton added in a presentation to analysts.

The firm closed two Argos branches in the period, in line with chief executive Terry Duddy’s plans to reposition the retailer towards online shopping.

At home improvements chain Homebase, like-for-like sales fell 1.5 per cent to £191m in the eight week period, which was well ahead of analyst forecasts of a 2.8 per cent fall, and margins improved. Full-year like-for-likes fell 4.9 per cent to £1.43bn.

The firm enjoyed its 16th consecutive quarter of rising market share.

“This has been a good outcome to a challenging year,” Duddy said in a year-end trading update.

The group said it now expects full-year profits to be around £90m, having raised its outlook for the second time in as many months.

Shares in Home Retail Group, which have gained 40 per cent in the past six months, closed 12 per cent higher.