Home Retail Group announces full-year results, with Homebase up 2.3% on a like-for-like basis, as store closure programme continues and Argos reporting flat sales at 0.6%, whilst seeing growth online and enhancing its store portfolio.
Despite a disappointing performance in the final trading period - the eight weeks to February 28, 2015 - with Argos down 4% (5% LFL) and Homebase down 4.7% (0.9 LFL), both retail chains finished FY2014/15 on a positive, reporting sales of £4,096m and £1,479m respectively for the full 52-week period.

Home Retail Group chief executive John Walden said of the results: "We are pleased to have delivered another full-year of like-for-like sales growth in both Argos and Homebase. Although our sales performance was weaker in the final short trading period, we managed the business effectively during this period and achieved a good performance in both gross margin and costs. As a result of this, we expect that group benchmark profit before tax for the FY15 financial year will be towards the top end of the current range of market expectations of £120m to £132m."

Argos saw an uplift of 25 basis points on its gross margin for the 52 weeks ended February 28, 2015, boosted by a reduced level of promotional activity, while new store openings contributing 0.5% to its sales performance. The multi-channel retailer expanded its store portfolio by 21 stores during the year - in line with its previously-announced expansion plans - taking its portfolio to 755. The increase comprised 30 new store, including 20 Argos digital concessions within Homebase and seven new small-format digital stores, partially offset by nine store closures.

Full-year internet sales represented 46% of total Argos sales, up from 44% last year. Within this, mobile commerce grew by 38% to represent 25% of total Argos sales.

Homebase, meanwhile, scaled back its store portfolio by 27 stores to 296 - a reduction that is ahead of the home enhancement retailer's previous guidance for the current financial year that was announced as part of its Productivity Plan. Net closed space reduced sales by 3% during the year, with 30 store closures, offset by three store openings. Full-year gross margin declined by approximately 100 basis points at Homebase, principally driven by an increased level of stock clearance in respect of the store closures.

Mr Walden added: "Argos continues to make good progress with its Transformation Plan. Over the plan's first two years we have delivered a significant amount of change and many new capabilities. However, it is important that we achieve an appropriate balance between the implementation of these new capabilities and ensuring good customer experiences. We are on track to deliver both the Argos Transformation Plan and the Homebase Productivity Plan over the next three years."