Home Retail Group hit by £852m charge after Argos takeover
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.