But the retailer is to book an additional£100m charge at DIY arm Homebase and£35m at Argos.
The store group said it will meet market profit expectations of approximately£320m for the year just ended on February 28, but anticipates “extremely challenging” conditions in the current financial year.
Catalogue chain Argos reported a 1.6 per cent like-for-like sales decline in the eight weeks to the year-end, bringing the second half and full-year falls to 6.2 per cent and 4.8 per cent respectively.
Argos’s total sales over the eight weeks rose 1.6 per cent and the full-year total was down 0.9 per cent at£4.28bn.
Homebase’s comparable store sales fell 10.2 per cent over all periods. Over the eight weeks total sales fell 5.5 per cent, bringing annual turnover to£1.51bn – a slide of 3.5 per cent.
Halfway through the year Home Retail wrote down£382m of goodwill against Homebase and made a£95m impairment charge to the carrying value of various store-related assets and a£66m onerous lease provision.
Today the retailer said: “Based on the latest market outlook, it is expected that an additional exceptional charge of approximately£100m will be taken in the financial year just ended in relation to further impairments of store-related assets and provisions for onerous leases. There is no additional writedown in respect of goodwill.”
Argos’s£35m exceptional charge, also in the year just ended, relates to restructuring including head office streamlining – including job losses – and consolidation of warehouses. The changes will deliver annualised cost savings of£50m.
Despite an unsettled outlook, Home Retail chief executive Terry Duddy was confident. He said: “We are responding with the necessary trading and cost actions, and believe the group will maintain its strong relative position and competitive advantage.”
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