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Home Retail profits drop in H1, sales up in Argos, Homebase segments

RBR Staff Writer Published 24 October 2013

Home Retail Group reported a sharp decline in first-half profit excluding certain items, while sales increased on the back of improved performance by its Argos and Homebase segments.

For the 26 weeks ended August 31, the company's pre-tax profit plunged to £14.2m from £46.7m in the previous year. Revenue for the period grew 3% to £2.596bn from last year's £2.531bn.

Segment-wise, Argos sales in the 26 weeks increased 1.8% year-over-year to £1.72bn, and like-for-like sales grew 2.3%.

Homebase segment's total sales increased 4.4% and like-for-like sales rose 5.9% as the seasonal products benefited from the improved weather.

With profits declining for five years in a row, Home Retail Group is updating its Homebase stores and seeking to revamp Argos by increasing sales through its website.

The firm noted that total online sales now accounted for 43% of Argos' total sales, with sales generated through smartphones and tablets representing 16% of overall sales.

Home Retail Group chief executive Terry Duddy said "As we look ahead to the second half of the year, we expect consumer spending will remain subdued, and whilst some macroeconomic indicators are improving, these have not yet led to an increase in household disposable income."