Home Retail profits fall in tough trading conditions
Home Retail Group, owner of Argos and DIY-chain Homebase, reported a 9.5pc drop in pre-tax profits and warned trading will continue to be tough.
8:06AM BST 20 Apr 2011
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The group also said on Wednesday the Sara Weller, the managing direcor of Argos, is standing down for personal reasons.
Home Retail Group
Profits fell to £265.2m in the year to February 26, down from £293m in previous year, the company said in its results statement. Revenue slid 2.8pc to £5.85bn and the cash gross margin fell 4pc to £2.18bn.
Looking ahead, the company said: "Prospects for the 2011/12 financial year are uncertain as consumers’ disposable income, and their willingness to spend, is impacted by an increased VAT rate, an increase in personal taxes and the rising cost of living plus the additional threat of public sector job losses and potential interest rate increases."
The company reiterated forecasts made with a profit warning last month that it expects a low-to-mid single digit percentage fall in like-for-like sales at Argos this financial year, along with a broadly flat outcome at Homebase.
Despite savings initiatives, Home Retail said rising prices would push up costs at both Argos and Homebase over the coming year.
The company will pay 10p a share dividend on July 20, maintaining its full year payout at 14.7p.
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