Home Retail Group books goodwill impairment charge relating to Sainsbury’s offer
Home Retail Group has booked a £852m exceptional goodwill impairment charge related to the recommended takeover offer from Sainsbury’s. The charge results from when Argos was owned by Great Universal Stores. Consequently, the company reported a fiscal year pre-tax loss of £804m. Excluding the exceptional charge, Home Retail Group made an annual profit of £94.7m, down 28% year over year, but slightly ahead of estimates. 

Argos's owner hit by £852m charge after Sainsbury's 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 exceptional impairment charge relates to Argos's prior ownership under Great Universal Stores

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."