LONDON (Reuters) - Britain’s Home Retail Group HOME.L said first-half profit had jumped by half after a hot summer helped its DIY chain Homebase to its best performance in a decade and Argos benefited from growing online demand via mobile devices.
The group said on Wednesday underlying pre-tax profit for the six months to August 31 had risen 53 percent compared with the same period a year ago, to 27.4 million pounds - ahead of a company-compiled consensus forecast of 23.6 million pounds.
Shares in the firm were up 4 percent to 191.8 pence at 0739 GMT.
After five straight years of profit decline, Home Retail is implementing a turnaround plan, revamping its Homebase stores and reinventing household goods retailer Argos from a catalogue-led to digitally-led business, targeting a 15 percent rise in sales to 4.5 billion pounds by 2018, up from 3.9 billion in 2011/12.
Group revenue rose 3 percent to 2.6 billion pounds in the half, helped by a strong summer of garden furniture and barbecue sales at Homebase, where like-for-like sales grew 5.9 percent, its best performance since its acquisition in 2002.
At Argos, which makes around 70 percent of group revenue, underlying sales rose 2.3 percent in the half, led by demand for tablets and home electrical appliances.
Internet sales increased to 43 percent of total sales at Argos, the firm said, with mobile commerce more than doubling to now account for 16 percent of sales. That jump was helped in part by new smartphone apps driving more traffic to its website.
“Both Argos and Homebase are making good progress with their investment plans, and remain on track to deliver their long-term strategic objectives,” said Chief Executive Terry Duddy, who announced last month he would quit by next July.
Duddy said that while he expected consumer spending to remain subdued, the firm was in good shape as it approached Christmas.
Ahead of that key trading period Argos has weighed into the competitive tablet market with its own-brand MyTablet, priced at 99.99 pounds, undercutting Tesco’s (TSCO.L) recently launched “Hudl” offering by 16 percent .
The firm declined to provide any early sales details but said the tablet had enjoyed a “good start”.
Reporting by Neil Maidment; Editing by Rhys Jones and Pravin Char