Total sales were up 6 per cent to£5.85 billion, driven by a like-for-like sales increase of 2.4 per cent at Argos. However, comparable sales at Homebase fell 1.4 per cent.
Chief executive Terry Duddy warned that he expected a tough year ahead as consumer spending tightens. Argos will come up against tougher comparatives because of the World Cup last year.
However, he confirmed plans to increase the store portfolio to beyond 1,000 and over time for Argos to have more than 800 stores and Homebase more than 450.
Internet orders at Argos soared 45 per cent and represent more than 16 per cent of total sales. More than a third of Argos's sales are to customers using more than one channel.
The retailer confirmed plans to open three pilot stores in the UK for Irish homewares chain Home Store & More, which HRG bought a 33 per cent stake in last month. It also plans to open three stores a year in Ireland.