10 March 2011 – end of year trading statement

The trading update scheduled for release today was disappointing and this has seen the shares slip below the 200p level. Group benchmark profit before tax for the year just ended is now expected to be between £250m and £255m. The company noted continuing pressure on consumer spending.

The outlook for 2011/12 is relatively poor but this has to be put in context and both Argos and Homebase are exceptional brands with considerable value despite fierce competition and unhelpful trading conditions in the near term. Net cash at the year end was around £260m, which is significant given the market capitalisation of less than £1.6bn. On balance the shares remain a BUY below 200p. Results are due on 20 April.