Homebase fares better than Argos in Home Retail Group's bi-annual results

Homebase owner Home Retail Group's results for the 26 weeks to 29 August 2009 show the DIY/garden centre fared better than HRG's other brands including Argos with profits up 66 per cent to £49m.

Sales were up three per cent to £2,805m (2008: £2,736m) with like-for-like sales down two per cent at Argos and up three per cent at Homebase.

Benchmark operating profit was up 14% to £121m (2008: £106m), with a decline of £6m or seven per cent at Argos and an increase of £19m or 66 per cent at Homebase.

HRG claimed growth in market share at both Argos and Homebase and a "successful peak trading season at Homebase, with a strong operational performance and tight cost control", implying good weather boosted garden centre performance.

HRG said the weak pound is making imported items more expensive, particulalry at Argos. Homebase is becoming more dependent upon the discount weekends while competitor, Focus DIY is now seen as a more credible competitor.

Homebase is to adopt the Argos model of ‘click and collect', where customers reserve a product online, so that they are sure it is there when they visit the store. Homebase's 1.6m sqm of selling space includes almost a quarter of garden centre area.

HRG chief executive Terry Duddy said: "The trading performance at both Argos and Homebase exceeded our expectations. While the consumer environment proved challenging, we have adapted well and maximised the benefit from more favourable weather conditions for Homebase. Our focus on cash margin and an extremely tight control of costs have been the clear drivers of a successful first half performance."

"We continue to plan cautiously for consumer demand over the remainder of the financial year, and there will also be a more significant impact from adverse currency movements during this period. The Group's operational and financial strength will continue to sustain our competitive advantage in the market place."


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