20 April – final results

Results for the 52 weeks ended 26 February 2011 showed sales down 3% to £5.85bn and benchmark profit before tax down 13% to £254m.  Reported basic earnings per share were 23.1p and net cash at the period end was £259m.  The final dividend was held at 10.0p, maintaining the full year dividend of 14.7p.

Although both Homebase and Argos are being hit by subdued consumer spending, this is undoubtedly a quality business and we feel that the current share price puts a very conservative price tag on it.  The yield of 6.8% should prove attractive and offer support.  Although the price has rallied since our last update the company is cheap compared to many other retailers.   We believe a BUY rating is well deserved.