GUS, the retail and business services group and owner of Argos, Homebase and Burberry, reported strong first quarter sales growth on Wednesday, but warned it would be difficult to continue the same momentum for the rest of the year.
“We believe that GUS is in good shape to continue to deliver growth going forward, although perhaps not at the rate of the first quarter,” said John Peace, chief executive.
Argos substantially outperformed the non-food retail market, which saw 3 per cent growth overall, by 5 percentage points, with like-for-like sales growth of 8 per cent. Total sales growth for the three months to June 30 grew by 14 per cent. The Argos website has almost doubled web sales in the last year according to David Tyler, financial director.
In contrast Homebase showed only 3% like-for-like sales growth, for the four months to June 30, in comparison with 6.2% achieved by successful rival Kingfisher’s B&Q. GUS, which acquired the chain last year, defended Homebase’s results saying that the recent acquisition was “not yet benefiting from initiatives underway.” The group acknowledged that gross margins were marginally down year on year. Homebase is trialling a new range of home furnishings and homewares in the Autumn.
Experian, its financial information arm, saw sales grow by 11 per cent overall and by 16 per cent at constant exchange rates. In North America sales grew 4 per cent year on year and by 14 per cent at constant exchange rates. Growth in consumer borrowing in the UK helped to drive an 22 per cent year on year increase in sales at Experian International.
Burberry released trading figures on July 14, reporting an 18 per cent rise in total revenues, pushed mainly by new store openings.
Responding to the Competition Commission’s proposals to regulate sales of extended warranties, GUS remained positive, saying that warranties were “not a large part of [Argos’s] business.”
GUS denied any plans to demerge Experian, but reiterated the 2004 date for the IPO of its South African business.
GUS shares were down 1p from 705p in morning trading in London.