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| Argos and Homebase firm cuts dividend as sales fall | Argos and Homebase firm cuts dividend as sales fall |
| (40 minutes later) | |
| Home Retail Group (HRG), which owns Argos and Homebase, has said it will significantly cut this year's dividend. | Home Retail Group (HRG), which owns Argos and Homebase, has said it will significantly cut this year's dividend. |
| The news came as HRG reported sales fell sharply over Christmas. | The news came as HRG reported sales fell sharply over Christmas. |
| At Argos, like-for-like sales - which strip out the effect of store openings - were down 8.8% in the last 18 weeks of 2011. | At Argos, like-for-like sales - which strip out the effect of store openings - were down 8.8% in the last 18 weeks of 2011. |
| At DIY chain Homebase, weak demand for big ticket items dragged like-for-like sales down 2.6% - steeper than the 1.3% rate recorded over the last 44 weeks. | At DIY chain Homebase, weak demand for big ticket items dragged like-for-like sales down 2.6% - steeper than the 1.3% rate recorded over the last 44 weeks. |
| Catalogue sales specialist Argos - which accounts for 80% of HRG's total sales - has been hit by the squeeze from rising food and energy prices on its lower-income customers, who have been cutting back on electronics purchases in particular. | Catalogue sales specialist Argos - which accounts for 80% of HRG's total sales - has been hit by the squeeze from rising food and energy prices on its lower-income customers, who have been cutting back on electronics purchases in particular. |
| Profit margins at Argos were also eroded by a further half-percentage point, mainly due to higher delivery costs and spending on marketing. | Profit margins at Argos were also eroded by a further half-percentage point, mainly due to higher delivery costs and spending on marketing. |
| The firm said there would be a number of store closures this year, taking its total number of Argos outlets down from the current 759 to below 751. | The firm said there would be a number of store closures this year, taking its total number of Argos outlets down from the current 759 to below 751. |
| Profit margins at Homebase were more robust, rising a quarter percentage point, the firm said. | Profit margins at Homebase were more robust, rising a quarter percentage point, the firm said. |
| "In a trading environment that has been both volatile and demanding, Homebase has again seen more resilient sales," said HRG chief executive Terry Duddy. | "In a trading environment that has been both volatile and demanding, Homebase has again seen more resilient sales," said HRG chief executive Terry Duddy. |
| Shares in HRG fell 5.1% in morning trading in London on Thursday following the announcement. Shares have fallen more than 60% since February last year. | Shares in HRG fell 5.1% in morning trading in London on Thursday following the announcement. Shares have fallen more than 60% since February last year. |
| The latest disappointing sales data follows a 71% fall in half-year profits reported last year. | The latest disappointing sales data follows a 71% fall in half-year profits reported last year. |