Home Retail Group – owner of Argos and Homebase – has reported pre-tax profit down 11% to £293m and announced a share buy-back of £150m.
Home Retail Group chief executive Terry Duddy said: “The results for both Argos and Homebase exceeded initial expectations as we traded through the year. We have achieved further market share gains, demonstrated our commitment to remaining highly price competitive and controlled costs extremely 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. By continuing to invest and constantly develop our multi-channel leadership and differentiated formats, we will retain our competitive advantage and therefore remain well placed for the future.”
The retailer said its focus on cash generation has meant a further £130m of net cash was generated during the year. Capital expenditure will increase in the next financial year to £125-£150m from £87m in the year just ended.
Home Retail Group has been the subject of rumours of a takeover in recent weeks, most notably by Asda.
It said it will open fewer new stores, but sees further significant opportunities for multichannel, customer offer and format developments.
In the next financial year, approximately 130 Argos shops will be refurbished to reflect the new brand identity. Approximately 500 stores are expected to be refurbished over the next three years.