Mike Smith, chief executive, said: "We have looked at [Signet] because it's a business which fits into our competences. We are looking at businesses where we are already significant and have knowledge of the supply base and the management."
Mr Smith said the four areas of their acquisition search were toys, consumer electronics, housewares and jewellery. "We have looked at them, evaluated them and made approaches where we were able to do so, but either prices did not match what we were prepared to pay or the businesses weren't for sale... It could be a long courtship."
Argos stressed that many of the companies it has looked at were well under the overall limit of its spending power, which would take gearing to around 100 per cent, and emphasised it was not talking to anyone at present.
The comments came as Argos revealed a cash mountain of pounds 103m in June, despite a pounds 127m special dividend, worth 42p a share, paid to shareholders in May. Pre-tax profits soared 45 per cent to pounds 31.8m in 24 weeks to 15 June, spurred by sales up 18 per cent at pounds 561m. The shares responded with a rise of 14p to 757p.
Like-for-like sales growth has accelerated through the half year, starting at 8 per cent in the first 10 weeks, rising to over 9 per cent at the annual general meeting in May and finished averaging just over 11 per cent across the six months.
Tony Shiret, analyst at Barclays de Zoete Wedd, suggested this meant sales growth above that rate by the end of the period, which augured well for the second half, when the Budget should also be favourable for the group. "There is a very big Christmas orientation to the business and it looks like the Conservatives want to 'razz people up' for Christmas." He has raised his full-year profits forecast by pounds 13m to pounds 150m on the back of yesterday's news.
Argos reiterated plans to raise the number of traditional stores to between 500 and 600. On top of that, it estimates there is potential for a chain of 200 "call and collect" outlets, the smaller order-based store aimed at catchment areas with populations of under 35,000. Although the idea is still being evaluated, 10 stores should be open by December.
First Stop, an "ultra discount" format which started trials last year, has opened its second store in Bedford and a third is planned later this year. Meanwhile, Argos Direct, representing the group's involvement in bigger items, such as furniture, sheds and garages, saw sales jump 41 per cent to pounds 40.4m in the period.
The group's first move overseas, to Ireland, has gone well, with the first four outlets in the republic exceeding expectations. A further eight are planned, while investigations suggest Argos could establish 70 stores in Holland.