Home Retail profits rise, cautious on first half outlook

LONDON, April 29 (Reuters) - Home Retail, Britain's biggest household goods retailer, said changes to its Argos business and slowing sales of technology products would make for a challenging first half of the year, as it posted a 14 percent rise in annual profit.

The firm, which is transforming its larger, more profitable Argos chain from a catalogue-based household goods retailer into a digitally-led business said on Wednesday underlying pretax profit for the year to Feb. 28 rose to 132.1 million pounds ($203 million), slightly ahead of a forecast of 130 million.

Total sales grew by 1 percent to 5.7 billion pounds in the year with underlying sales at Argos up 0.6 percent and by 2.3 percent at its DIY chain Homebase, where a quarter of stores are being closed in response to weaker demand.

Home Retail, which hiked its full-year dividend by 15 percent to 3.8 pence, said it anticipated an improvement in the second half of its new fiscal year, helped by new Argos digital offers in time for peak trading. ($1 = 0.6516 pounds) (Reporting by Neil Maidment; Editing by Li-mei Hoang)

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