Page last updated at 07:19 GMT, Wednesday, 28 April 2010 08:19 UK

Argos owner Home Retail Group sees profits slip

Argos store
Argos is doing well despite the tough trading environment, the firm said

Argos and Homebase owner Home Retail Group has reported a fall in annual profits and predicts the coming year will remain "difficult".

Underlying profits fell to £292.9m for the year to 27 February, down 11% from last year's figure of £327.7m.

However, the company said that results for both Argos and Homebase had "exceeded initial expectations".

Home Retail Group also announced plans to return £150m to shareholders through a share buy-back.

Recent reports have suggested that the firm could be a takeover target, or could come under pressure to break itself up.

Pound pressure

Home Retail's pre-tax profit after exceptional items was £293m, compared with a post-exceptional loss of £394.2m last year when the figure was hit by a big writedown in the value of the Homebase DIY business.

Total sales at the group in the year to February rose by 2% to £6.023bn, with like-for-like sales - which strip out the impact of store openings - down 2.1% at Argos and up 2.7% at Homebase.

The company said that household spending and consumer confidence had been "severely hit" in the past year.

It also said profits had suffered from the weakness of the pound on the foreign currency markets, which meant imported goods cost more.

However, it said Argos and Homebase had held or increased market share in nearly all of their product markets.

It also said it had made "significant" cost cuts, and had reduced its cost base by £64m.

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Argos owner lifts profit forecast
14 Jan 10 |  Business

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