9 June 2011 – interim management statement

A trading update covering the period from 27 February to 28 May has disappointed and the shares have crashed back below 200p. In particular, like-for-like sales at Argos were down 9.6%. The consumer electronics market has declined by significantly more than the company had anticipated and this accounted for the majority of the fall in Argos’ sales. At Homebase like-for-like sales increased by 1.6% with seasonal related categories such as garden furniture, plants and exterior decorating, performing strongly.

The announcement is downbeat and it is not difficult to see why the share price has slipped.  However, even taking into account the tough trading backdrop, we feel that the company remains good value.  Whilst the stock is very much out of fashion now should still prove a good time to BUY.