Home Retail Group post 40% increase

Home Retail Group, formerly Argos Retail Group, announced a 40% increase in first-half profit today.

The country’s biggest household goods retailer said strong flat-screen TV sales compensated for weakness in the do-it-yourself chain, Homebase.

The group exceeded analysts’ forecasts of £142 million by announcing pre-tax profit of £149.8 million in the 6 months to the beginning of September. Like-for-like Argos sales grew 1.4% compared to a 2.5% fall at Homebase.

Sales of flat-screen TV’s, video games systems, mobile phones and navigation systems were strong at Argos, which, in July, launched its biggest ever catalogue and increased product lines by 9% to over 18,000 items.

Gross margin gains compensated for a 0.3% fall in group sales, affected by the wet summer. Gross margin at Argos increased by 125 basis points and Homebase was up 300 basis points, boosted by supply chain and stock management changes and foreign exchange gains.

In a statement, Terry Duddy, chief executive, said the group remains cautious as it approaches the Christmas period.

In April, the group acquired a 33% interest in an Irish out-of-town homewares business called HomeStore&More. It said that this business was trading in accordance with its expectations.

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