GUS shines with 44 per cent profits leap

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The Independent Online

The retail giant GUS, which owns the Argos chain and controls the upmarket Burberry business, yesterday painted a rosy picture of trading as profits rose 44 per cent in the first half of the year.

John Peace, the GUS chief executive, said: "Although we face some challenges in the second half, we remain confident in the outlook for the future."

Shares in GUS closed up nearly 3 per cent, or 20p, at 763p - making the stock the second-biggest riser in the FTSE 100 index last night.

The company announced that pre-tax profits, before goodwill amortisation and exceptional items, rose 44 per cent to £354m in the six months to 30 September on sales of £3.8bn, up 24 per cent.

Mr Peace said: "We are delighted with the progress being made by our three main businesses, all of which have the potential to be leaders in their sector."

Argos put in a solid performance with sales up 14 per cent to £1.4bn and operating profits up 27 per cent at £73.9m, while its credit checking business Experian grew sales and profits 13 per cent and 28 per cent respectively. The numbers, in general, were above analysts' expectations and prompted upgrades to full-year forecasts. GUS's house brokers, Cazenove and Merrill Lynch, lifted their profit forecasts to about £800m.

The only blip was Homebase, purchased by Gus last year, whose sales grew 4 per cent - or 2 per cent on a like-for-like basis. It contributed a £71.5m operating profit.

GUS remained tightlipped yesterday on how or when it would return cash to shareholders.