- Home Retail Group posts full-year pre-tax loss of £804m
- Business driven into the red by exceptional non-cash charges relating to Sainsbury’s bid
- Argos sales flat but Homebase sales fall 3% during the period
- Boss John Walden hails “landmark” year for the group
Argos owner Home Retail Group has slumped to a full-year pre-tax loss of £804m after one-off charges relating to the Sainsbury’s bid.
The group said the recommended offer from the supermarket giant “resulted in an exceptional goodwill impairment charge” of £852m, driving its bottom line into the red.
Home Retail said its benchmark pre-tax profit – from both continued and discontinued operations – decreased 28% to £94.7m during the 52 weeks to February 27, slightly ahead of the market consensus of £93m.
Total sales dipped 1% during the year to £5.66bn. Argos sales were flat year-on-year at £4.09bn, while Homebase sales fell 3% to £1.43bn during the period, largely owing to the closure of 34 Homebase stores.
Despite the fall in sales, the group’s chief executive John Walden hailed a “landmark” year.
Home Retail has already completed the sale of its DIY chain to Australian giant Wesfarmers in a £340m deal. The acquisition was completed on Home Retail’s year-end date, but the balance will be received and accounted for in its 2016/17 financial figures.
Sainsbury’s is also expected to complete its £1.4bn move for Argos after out-bidding rival suitor Steinhoff. The grocer’s offer has been “unanimously” recommended to shareholders by the Home Retail board.
Walden previously said that Argos had “created good value” for bidders and its progress was highlighted in the full-year statement.
The retailer completed a national roll-out of its Fast Track same-day home delivery service during the year and opened 94 digital concessions and collection points, taking the total number to 114 across the UK.
Argos now has 177 digital stores, representing a fifth of the retailer’s estate, while its multichannel drive saw ecommerce account for 49% of sales during the year. M-commerce through Argos.co.uk jumped 10% and now accounts for 28% of total sales.
Walden said: “The past year has been a landmark period for the group, during which we have completed the sale of Homebase and recommended to shareholders the offer from J Sainsbury plc for the acquisition of the remaining group, principally Argos.
“I am pleased that, with its offer for Home Retail Group, Sainsbury’s has recognised the good progress we have made in transforming Argos into a digital retail leader.
Walden added that Argos’s digital capabilities, Fast Track delivery and digital store formats left the retailer “well positioned for an exciting future.”