Home Retail Group, the owner of the Argos and Homebase chains, has ditched its final dividend for the first time in six years, after a slump in profits and sales at the general merchandise giant.
In the wake of its fourth consecutive year of falling profits, its chief executive Terry Duddy mounted a vigorous defence of his strategy and said it did not make economic sense to shut a large number of Argos' 748 stores.
The group passed on its final dividend for the first time since HRG was formed in 2006.
Pre-tax profits tumbled by 60 per cent to £102m over the year to 25 February, on total sales down 6 per cent to £5.5bn.
The main driver of these falls was at the catalogue specialist Argos, which suffered an 8.9 per cent drop in like-for-like sales and another plunge in gross margins.
Mr Duddy in effect ruled out mass store closures at Argos by explaining that if it quit 100 of its worst-performing shops it would still have rental obligations of £125m over seven years and no sales.
Argos expects to close about 10 stores this year and 230 shops have leases that come up for renewal in the next five years.
Operating profits at Homebase fell by 52 per cent to £22.8m with underlying sales dropping 2 per cent. Shares in HRG lost 13.45p to 87.55p.