Argos profits fall

Demand for toys remains high, but overall profits for the retailer fall by 12 per cent.
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Home Retail Group's pretax profit for the fiscal year ended February 27th 2010 fell 11 per cent to £292.9 million, from £327.7 million a year earlier, even though total sales rose two per cent to £6.02 billion from £5.90 billion.

The group posted a net profit of £209.8 million compared with a loss of £413.1 million last year.

Operating profit at Argos fell 12 per cent as same-store sales fell 2.1 per cent. Argos' sales rose 1.5 per cent to £4.35 billion from £4.28 billion.

Argos saw particularly strong demand for consumer electronics products and toys. The Chad Valley brand, acquired from Woolworths last year, has already become the firm's leading toy brand.

The company said the last year had been challenging, with consumer spending "severely hit" and has warned that the retail sector is set to remain difficult this year.

Home Retail said it has tackled the environment by managing costs tightly to support both operating profit and cash generation.

"Our approach over the last year has also prepared us for the year ahead, which is likely to remain difficult for UK retail," said chief executive Terry Duddy.

The company did announce a share buy-back scheme, however, set to return up to £150 million to shareholders over the next year.

Home Retail said in a statement that it will "continue to demonstrate clearly its competitive advantage and its strong financial position."

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Argos sales slip

Home Retail Group reports sales decline since the beginning of 2010 of 9.4 per cent year-on-year.

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