Argos, Homebase and Habitat owner reports profits down for fifth year

Home Retail Group chief executive Terry Duddy hails 'good outcome to … challenging year' after 23% fall in profits

Argos has underlined the waning importance of the high street to retailers by revealing that more customers buy its products online and through click-and-collect services than by making traditional in-store purchases.

Profits at its parent, Home Retail Group, which also owns Homebase and Habitat, have fallen for a fifth consecutive year as the retail industry undergoes a transformation against a backdrop of weak consumer confidence.

Homebase stores will increasingly stock Habitat and Laura Ashley products.

 Home Retail Group reported a 23% fall in profit before tax to £99m in the 12 months to 2 March, with revenues broadly flat at £5.48bn.

Despite what he described a "challenging year", HRG's chief executive, Terry Duddy, said the transformation of Argos from a catalogue to a digital retail business was progressing, as he said like-for-like sales increased for the first time in five years, delivering a 2% rise in like-for-like revenues with underlying profits up 6% to £100m.

Duddy explained the key factor in growth was click-and-collect sales – where online purchases are collected in the shop – which now account for 30% of business.

He said: "If you go back to 2002 when we went from a telephone system for ordering products and went onto the internet for the first time, did I think that would now be 30% of our sales? No."

However, Homebase profits were washed away by poor weather last summer, with sales down nearly 5% and underlying profits halving to £11m.

With nearly £400m of cash in the bank and no debt, the company is pushing ahead with a three-year investment plan announced last October. Homebase stores will be given a facelift, and will increasingly stock products from Habitat and Laura Ashley, including a recently created range of Habitat paints, wallpapers and tiles.

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Article source : http://www.guardian.co.uk

MP John Robertson calls for official tax inquiry into npower

Npower admitted to energy and climate change select committee that it had paid almost no corporation tax for three years

A row over alleged tax avoidance by npower has flared again after a member of a parliamentary watchdog called for an official investigation.

The call from John Robertson MP, who sits on the energy and climate change select committee, came as the number of people signing a petition against npower rose above 167,000.

"The taxman should establish an urgent inquiry to get to the bottom of how npower have got away with paying no tax despite making hundreds of millions of pounds in profits," said Robertson, a long-term campaigner over fuel poverty. "If npower aren't tax dodging, what possible reason can there be for a business in Britain paying money to a German company via Malta?"

 Npower admitted to his committee two weeks ago that it had paid almost no corporation tax for three years but explained that was because it could write off profits against the huge power station investments it was making.

The argument blew up again this week when German-owned n power admitted money was moving via a company it owned in Malta and revelations that the former boss of n power, Volker Beckers, was working as a non-executive director for HM Revenue and Customs.

But the company denied that the use of its Maltese financing subsidiary, Scaris Ltd, was designed to avoid paying tax in Britain and was just a way of borrowing cash to fund British investment "more efficiently."

Paul Massara, chief executive of npower, said: "The use of Malta in making payments on our financing made no difference to our UK tax contributions. Npower has not, and will not, engage in tax avoidance. Our corporation tax bill was low between 2009 and 2011 because we made losses in our retail business and invested billions into the UK."

But Richard Murphy, an accountant who runs a consultancy called Tax Research, said it remained unclear why RWE, npower's parent company, would lend money to its UK business via Malta "unless tax avoidance was its motive. The tax saving that results is very clear."

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UK's largest coal producer 'seeks voluntary liquidation'

Up to 2,000 jobs at risk after UK Coal Operations hit by £300m losses and 'disastrous' Daw Mill mine fire

Britain's largest coal miner, UK Coal, is fighting for survival as it grapples with the consequences of the devastating fire that closed its biggest colliery.

The firm refused to deny reports that it is seeking voluntary liquidation, which would allow parts of the business to continue trading, in order to avoid enforced liquidation and a full shutdown. Following the blaze at the Daw Mill colliery in March the company lost £100m of equipment, £160m of coal and ran up £35m in costs, making further restructuring inevitable.

 UK Coal said this week that it is holding talks "with a wide range of interested parties" over the future of its last two deep mines – Kellingsley in North Yorkshire and Thoresby in Nottinghamshire – as well as six open-cast mines in north and central England. The company produced 7.3m tonnes of coal in 2011, helping generate 5% of the UK's electricity.

Kevin McCullough, chief executive of UK Coal Mine Holdings, said: "Our main focus has been on preserving 2,000 jobs and securing the future of UK coal mining. Our remaining mines have been performing well since the fire at Daw Mill and we continue to work closely with our employees, government, pension funds, the Pensions Regulator, suppliers and customers. We remain positive that we have an underlying profitable business."

"There will undoubtedly be some difficult decisions as we have had to look at all possible options, but there is a good business here with 2,000 families depending on our workforce and I am confident we will be able to announce more news in the coming days." Company spokesmen did not respond to further questions.

The company announced the closure of Daw Mill in north Warwickshire with the loss of 650 jobs in March after the worst coal-mining fire in 30 years.

The fire was the latest blow to the industry following Hargreaves Services's decision last year to mothball the Maltby mine near Rotherham with the loss of 500 jobs.

Voluntary liquidation would allow a subsidiary to run the firm's surviving mines but could pass on the company's £540m pension deficit to the UK Pension Protection Fund, which would force losses on some of the company's 6,800 savers. If UK Coal fell into insolvency the workforce could see 10% of the value wiped off their pensions. The Pension Protection Fund pays 90% of a pension's value to workers yet to reach retirement age, but usually pays out 100% to existing retirees and those with long-term health problems.

UK Coal has been grappling with its pension deficit for years and recently spun off its less-risky property business, Harworth Estates, to help solve the problem in a move that won the approval of the Pensions Regulator.

"At £540m this would be one of the very largest hits for the PPF, since it opened in 2006," said John Ralfe, an independent pensions consultant. "This would wipe out half [PPF's] surplus." The PPF reported reserves of £1.06bn in 2012. "Last year's convoluted restructuring, approved by the Pensions Regulator, only managed to paper over the cracks. The devastating pit fire has brought things to a head very quickly, but with UK Coal's pension problems things were never going to end well."

A spokeswoman at the Pension Protection Fund said it was monitoring ongoing developments and liaising with other parties including the pension scheme and the Pensions Regulator.

Chris Kitchen, secretary of the National Union of Mineworkers, said it was disappointed that the government had not done more to help UK Coal, following a promise from former energy minister John Hayes in March that "the government will do all it can ... to protect the interests of [the Daw Mill] workers".

The NUM wants the government to grant closure aid to Daw Mill, which would allow mine workers to keep an enhanced redundancy package worth £12,000 more than the statutory minimum. "The minister made a statement that they wanted to help. There is a route that is open to them. But it involves the government spending money."

A spokesman at the Department for Energy and Climate Change said the government was helping Daw Mill workers find jobs through "full mobilisation of a job centre rapid response process".

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Article source : http://www.guardian.co.uk