Sales up at Argos in the year to February 28 CC

The UK's biggest household goods retailer Home Retail Group, which owns Argos and Homebase, reported higher annual profits and higher annual sales.

Home Retail said cost savings and a rise in sales helped underlying pre-tax profits increase 14% to £132m ($203m, €184.5m) for the year to the end of February, slightly better than forecast.

Shares in the company rose 2.1% at 10:20GMT on Wednesday.

Underlying sales rose 0.6% at retailer Argos, which experienced a strong first half of the year followed by a weaker six months, amid slowing demand for electronic items.

The group's chief executive John Walden said he expected the sales trend to mirror itself in the current year.

"We have suggested that we may have modest declines year on year in the first half (at Argos,)" Walden said. "A number of things suggest that we ought to be looking for an improved second half versus first."

"Both Argos and Homebase contributed positive like-for-like sales and profit growth for the second successive year. I believe the strategic plans we are pursuing across the Group will enable us to innovate and lead in a rapidly changing retail market."

Home Retail has reduced the number of stores in its Homebase chain, on the back of a decline in popularity of the home-improvement market, cutting the number of stores by 27 to 296.