Group Highlights - Introduction

Home Retail Group, the UK’s leading home and general merchandise retailer, today announces its results for the 26 weeks to 1 September 2007. The results of the prior year’s first half reflect a non-comparable financial period due to the change in year-end and also include certain financial impacts of GUS plc’s ownership of Home Retail Group up to the point of demerger1. To assist with analysis and comparison, certain pro forma information for the prior period has therefore been provided to eliminate the distortions of these two impacts on the performance of Home Retail Group.

Commenting on the half-year result, Terry Duddy, Chief Executive of Home Retail Group, said:

"The Group has performed very strongly in the first half, both from an operational and financial point of view. There was a particularly good result at Argos with profit growth of 50%, while Homebase grew profits by 12% despite some difficult market conditions. Although we remain cautious given the uncertain consumer outlook, as we move into the key seasonal period both businesses continue to enhance their customer offers, while also benefiting from the leverage of our shared group operations."