Home Retail, which owns Argos and Homebase, revealed benchmark full-year pretax profit increased 27% to £115.4m. Retail Week looks at what the analysts say.

Following this update, we are upgrading our FY15 ‘low end of the range’ pre-tax profit forecast from £117m to £130m. We have been impressed with the early, initial results of the new Argos format, which is currently being rolled out. Private equity is now less likely to take an interest attracted by the strong balance sheet and AO.com, a recently listed competitor, will start to make ‘inroads’ into the Argos electrical categories – Freddie George, Cantor Fitzgerald

The finals from Home Retail today don’t contain many surprises, given the pre-close guidance that PBT would be “slightly above the top end of the current consensus range of £107m-111m”, with £115.4m reported, with a year-end net cash position of £331m. Argos made £112m in operating profit and Homebase c£19m – Nick Bubb, independent analyst

There is no doubt that Argos has done much to help itself. However, in these results it is also clear that the retailer has benefitted from a slump in competition from elsewhere. In particular Tesco and Asda, which a few years ago seemed determine to replicate Argos’ model, have been distracted by the issues in their core food market, providing Argos with some welcome breathing space.

Argos is doing the right things. In the past it has been criticised because it’s only USP, convenience, was easily replicated. However, it now looks to be addressing that, fighting back hard against bigger rivals, whether using its stores (against Amazon and eBay), improving its product range (compared to the grocers) or continually improving its logistics.

Homebase continues to re-invent itself as a ‘home destination’ by improving its online credentials and, more importantly, its stores. These improvements should better insulate Homebase against the vagaries of the weather and the country’s on-off love affair with DIY. Moreover with the housing market continuing to heat up prospects for the short term are good – Matt Piner, Conlumino