Home Retail Group reports rise in profits

<p>The owner of Argos and Homebase posted a pre-tax profit rise of 32 per cent.</p>

Home Retail Group has enjoyed a strong past year with a rise in pre-tax profit.

The owner of chains such as Argos and Homebase announced that for the year to February 28th, profits before tax grew by 32 per cent to £93.8 million. Sales across its operations were up one per cent to £5.7 billion with Argos and Homebase enjoying a rise of 0.6 per cent and 2.3 per cent respectively in like-for-like sales.

On top of the boost in sales, Home Retail Group's operation and distribution costs had fallen by £14 million to £1.9 billion. Benchmark profit before tax grew by 14 per cent to £132.1 million while the company's year-end cash balance stood at £309 million.

The company described the latest trading update as a "good overall performance" and allows brands such as Argos to continue their transformation plan. It has also boosted the group's share price which grew by 2.93 per cent as of 09:10 BST on Wednesday (April 29th).

John Coombe, chairman of Home Retail Group, said: "The group has completed another year of good financial performance, delivering both like-for-like sales and profit growth, together with a strong year-end cash balance of over £300 million.

"Our focus on managing costs and gross margin together with our ongoing cash management were all critical in delivering this good overall financial performance. We are recommending an increase of 15 per cent to the full-year dividend."

Argos improvement

Home Retail Group's success has allowed Argos to expand its operations. The group confirmed that the brand had completed the national roll-out of the 'hub & spoke' distribution network which has enabled same day collection of around 20,000 products. It has also opened 60 digital stores across three different formats.

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