Home Retail to close or relocate 75 Argos stores

Home Retail, owner of the Argos and Homebase brands, warned persistent fragile market conditions mean it will close 75 stores over the next five years.

The retailer said reported pre-tax profit rose 74% to £51m, after an exceptional credit of £35m following the closure of its final salary pension scheme.

Benchmark pre-tax profit fell 37% to £18m for the 26 weeks to September 1st 2012 while sales slipped 1% to £2.5bn.

Argos like-for-like (LFL) sales grew 0.6% during the period compared to a decline of 9.1% the same time a year earlier.

"We have concluded a comprehensive business review of Argos which highlighted a clear opportunity to transform the business through increased investment in digital technologies," the group said.

At DIY chain Homebase LFL sales fell 6.2% versus a 0.6% increase previously.

Chief Executive Terry Duddy commented: "Market conditions remain fragile and hence we will continue to plan cautiously, however we are in good operational shape as we approach our peak trading period."

Home Retail said operating and distribution costs were reduced by £11m to £933m while it generated cash of £122m during the period with closing net cash position of £316m. Cash gross margin fell 2% to £952m.

Home Retail, which holds the rights to the Habitat brand and three of its stores, slashed its interim dividend payment to 1p from 4.7p in 2011.

CJ