Home Retail Group Plc (HOME.L,HMRLF.PK) Wednesday reported a higher profit for the full year, despite lower revenues, reflecting a gain on employee benefits. The UK's home and general merchandise retailer expects 2013/14 financial year to remain similar to fiscal 2013, citing inflationary pressures and low levels of consumer confidence.
The company said both of its businesses delivered market share growth, although their respective total markets declined further as customers continued to face pressure on their disposable incomes.
Argos sales were 3.93 billion pounds, compared to 3.94 billion pounds a year earlier. Argos' multi-channel sales penetration increased to 51 percent of total sales. Internet sales grew 10 percent and reached 42 percent of Argos' total sales.
Sales generated by Homebase declined to 1.43 billion pounds from 1.54 billion pounds last year. Argos and Homebase are two of the UK's leading household goods brands.
Terry Duddy, chief executive of the company stated, "...Argos delivered like-for-like sales growth for the first time in five years and multi-channel sales broke through the 50% threshold. Our strong financial position enables Argos to deliver on its transformation plan..."
Home Retail noted that its transformation plan will reposition Argos from a catalogue-led to a digitally-led business.
For the 52 weeks ended March 2, 2013, the company posted profit before tax of 130.1 million pounds, higher than 104.1 million pounds in the previous year. Excluding exceptional and other items, benchmark pre-tax profit was 91.1 million pounds.
Exceptional item in the recent year was a gain on employee benefits totaling 31.3 million pounds.
On a per share basis, earnings increased to 11.6 pence from 9.1 pence per share in the prior year. Benchmark earnings per share were 7.6 pence this year, while the company had posted 10.0 pence per share in fiscal 2012.
Annual revenues declined to 5.48 billion pounds from 5.58 billion pounds in the preceding year. The company said the previous financial year comprised 53 weeks to March 3, 2012.
The board has proposed a final dividend of 2.0 pence per share, to shareholders of record on May 24, payable on July 24. This, together with the interim dividend of 1 pence per share, will make a full year dividend of 3 pence per share, compared to 4.7 pence paid last year.
HOME.L is currently trading at 160 pence, up 2.7 percent, on a volume of 538,573 shares on the LSE.
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