GUS hits record after Argos outperforms

Argos owner GUS today posted record full-year profits of £827m (€1.2bn) after seeing sales soar at its three flagship brands.

Revenues from Argus' Irish stores are not published, but there are more than 550 Argus stores throughout the UK and Republic of Ireland, employing more than 23,000 people in total. The company announced a €20m expansion plan for Ireland last year.

GUS said catalogue retailer Argos outperformed its market, growing like-for-like sales by 5% to £3.38bn (€5bn) following strong demand for products including consumer electronics and toys.

And in a move that could signal the demerger of credit checking arm Experian, the group today announced a strategic review of its entire business.

GUS said the review was the “logical extension” of a series of changes since 2000 that has seen a partial flotation of fashion brand Burberry and exits from low-growth businesses such as home shopping.

It also pledged to spend £200m (€299m) on buying its own stock this year to build better value for its shareholders.

Details of the review came as GUS unveiled a 29% increase in pre-tax profits for the year to March 31 and a 6% hike in turnover to £7.5bn (€11.2bn).

In addition to rising demand for core products, the sales performance at Argos was lifted by price cuts at its 556 stores in the UK and the introduction of quick-pay kiosks.

Investment this year will focus on 35 store openings and the continued roll-out of the Argos Extra catalogue, which offers 4,000 more products than the main listings.

Store expansion plans are to be accelerated at DIY retailer Homebase, with 10 new branches due to open this year and up to 60 outlets over the following three years.

Like-for-like sales at its 278 Homebase stores rose by 3% to £1.48bn (€2.2bn) with growth fastest at outlets with the new “mezzanine format”, which devotes more space to kitchens, bathrooms and home furnishings.

Experian increased sales by 14% at constant exchange rates to £1.22bn (€1.8bn) after winning major contracts with firms in France, Italy, Spain and Korea.

The division spent £162m (€242m) on acquisitions during the year which contributed 2% to the sales uplift.

Fashion brand Burberry, in which GUS has a 66% stake, benefited from a strong performance by its womenswear division as it grew sales by 16% at constant exchange rates.

Chief executive John Peace said: “We have strong momentum in all our businesses, reflecting continuing investment and clear strategies to drive growth.”