Home Retail Group says profit to dive by a quarter

 
City A.M. Reporter
Home Retail Group forecast a 20-25 per cent reduction in first-half profit, with sales at its Argos stores continuing to fall as low income shoppers cut back on spending.

The firm, which also owns the Homebase DIY business, said it expected to make a year to the end of February 2011 underlying pre-tax profit of £250-£275m, which is in line with the bottom half of the current analyst range.

Sales at Argos stores open at least a year fell five per cent in the 13 weeks to 28 August, its fiscal second quarter.

At Homebase, the second-largest DIY retailer after Kingfisher's B&Q, underlying sales were flat.

"As always, the (full-year) outcome will depend upon trading at Argos in its peak Christmas period," said the firm.

Shares in Home Retail have lost 32 per cent of their value over the last year, lagging a 3 percent rise in the general retailers index.