Home Retail posts higher H1 profits but says Christmas is key

22nd Oct 2014 07:13

Argos and Homebase owner Home Retail reported higher first half sales and profits, driven by people buying DIY and garden products at Homebase during the summer, but cautioned that the group's full year results would depend on a good Christmas for Argos.Home Retail said sales in the 26 weeks to 30 August increased by 3% to £2,669m, with like-for-like sales rising 2.9% at Argos and up 4.1% at Homebase.It said Homebase had a good peak trading period, performing well throughout the half despite facing a tough task to match a strong second quarter last year.Homebase has undergone a comprehensive review with trial refits of 11 more shops including Habitat concessions. It continued to axe under-performing stores and reduce the size of the chain.Home Retail chief executive John Walden said Homebase would pursue a three-year plan through to the end of 2018 to boost store productivity, improve products and accelerate its online business."This will position Homebase as a smaller but stronger business, ready for investment and growth," he said.Argos was making good progress with an overhaul including refits of stores with new online ordering systems and a big advertising campaign.Overall underlying group profit lifted 13% to £30.9m although reported pre-tax profit fell 5% to £13.5m. It left its first half dividend unchanged at 1p.Basic benchmark earnings per share increased by 20% to 3p. Reported basic earnings per share were 1.2p.Walden said: "At this mid-way point in our financial year, we continue to expect to deliver full-year benchmark profit before tax in line with current market expectations."However, as always, the full-year outcome will depend upon the important Argos Christmas trading period."