No threat to GUS's £1bn profit

RETAIL giant GUS remains firmly on track for annual profits of nearly £1bn this year despite slightly slower sales growth at its star performer Argos.

Underlying sales at the buoyant catalogue chain were up 7% for the six months to 30 September, a growth rate just below the stellar 9% recorded for the first quarter.

Finance director David Tyler conceded the sales pace was softer but insisted that Argos was continuing to outperform its rivals.

'We are very happy. The market is up by between 2% and 3% so we are growing our share,' he said. 'We just had an extraordinarily good first quarter.'

Argos has enjoyed rapid growth on the back of a renewed focus on value - prices are down 5% on a year ago - a wider product range and the expansion of its home delivery arm.

Tyler added that the group's DIY chain, Homebase, was also performing in line with expectations, with like-for-like growth of 4% for the seven months to 30 September.

Credit checking business Experian registered a 15% jump in sales on constant exchange rates.

Shares in GUS have climbed almost 28% since hitting a low of 713 1/2p, on hopes for a lucrative break-up of the business when the group concludes a strategic review.

Tyler refused to comment on the possible outcomes today but said GUS would be holding on to all of its 66% stake in Burberry, the luxury goods group it spun off two years ago.