As Home Retail Group have announced their earnings this morning and I have seen you have previously covered them, I thought you may be interested in a comment from Joshua Raymond, Market Analyst at XTB.com. Please find comment below;
“Home Retail Group announced a 1% decline in sales for its full 2015 year performance, with profits before tax falling 28% to £94.7m. The firm also took a hefty impairment charge as goodwill associated to the Sainsburys takeover totalling £852m, meaning a total loss of £808m after tax.
At Argos, total sales remained flat at £4.09bn whilst Homebase – which has now been sold – saw a 3% drop in sales to £1.4bn.
This is a somewhat perplexing update for shareholders to digest. On the one hand, a decline in sales at Homebase was expected but then again, do they even care about Homebase anymore? The sale of Homebase was completed a few months ago and will contribute £337m in proceeds to its 2016 results.
And with the rest of the group now set to be taken over by Sainsburys, perhaps the only other concern right now is how Sainsburys major shareholders view these results.
They will be encouraged by the stability of sales at Argos but will be concerned with the increase in cost of sales, albeit mostly associated with store rollouts. The major benefit however is that Internet sales accounted for almost a half of all Argos sales, whilst sales by mobile increased by 10%. This is an area Sainsbury shareholders should be delighted to see given internet sales, especially via mobile, is an area that requires improvement across the group as a whole.”