Belfast Telegraph

Thursday 17 April 2014

Argos boss 'cautious' as profits slide

The owner of catalogue chain Argos said it was approaching the key Christmas trading period cautiously after posting a slide in profits.

Home Retail Group reported an 11% drop in pre-tax profits to £103m in the 26 weeks to August 28, after a slight fall in sales to £2.7bn.

Argos revenues were down 6.5% on a like-for-like basis, leading to a 4% total decline in sales for the catalogue business at £1.8bn.

The group warned that Argos' core customers had been hit harder by the economic climate and while sales of smaller products were improving, demand for big-ticket items including furniture was suffering.

There was a better performance at Homebase, which is also owned by Home Retail, as like-for-like sales declined 0.8% to £855.3 m.

Matthew McEachran, a retail analyst at Singer Capital Markets, said: "We remain cautious on the group's earnings prospects over the next 18 months given its over-exposure to the UK mass market customer through Argos, the UK housing market through Homebase and the likely squeeze on consumer spending in 2011."

Terry Duddy, chief executive of Home Retail Group, said: "We are about to enter our busiest trading period, and whilst we are planning cautiously, we do so from a position of operational and financial strength."