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Argos's owner hit by £852m charge after Sainsbury's takeover

Published 27/04/2016

The exceptional impairment charge relates to Argos's prior ownership under Great Universal Stores
The exceptional impairment charge relates to Argos's prior ownership under Great Universal Stores

Argos owner Home Retail Group has reported a full year pre-tax loss of £804 million after being hit with an £852 million exceptional goodwill impairment charge relating to the Sainsbury's takeover of the high street retailer.

Stripping out the charge, annual operating profit slumped 28% to £94.7 million and sales across the group were down 1% to £5.6 billion.

The exceptional impairment charge relates to Argos's prior ownership under Great Universal Stores, which acquired the business in 1998.

The group said: "The recommended offer from Sainsbury's for the purchase of Home Retail Group resulted in an exceptional goodwill impairment charge of £852 million."

Earlier this year, supermarket Sainsbury's struck a deal to acquire Argos for £1.4 billion and the deal is expected to complete before September.

John Walden, chief executive of Home Retail Group, said: "The group ended the year with a cash balance of £623 million, which is significantly stronger than previously anticipated.

"The past year has been a landmark period for the group, during which we have completed the sale of Homebase and recommended to shareholders the offer from J Sainsbury for the acquisition of the remaining group, principally Argos."

The group sold Homebase to Australian retail giant Wesfarmers for £340 million in January.

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From Belfast Telegraph