Change of Year End

Home Retail Group Plc
14 March 2007


                                                                   14 March 2007


                             Home Retail Group plc
                              Change of year-end

As previously announced, Home Retail Group has changed its year-end from a
calendar year ended 31 March to a 52 week year ending on the Saturday closest to
the end of February. This will achieve coterminous year-ends across the Group
and avoid distortion in the financial results relating to the timing of Easter.

The Group will this year report on a statutory basis the financial period ended
3 March 2007. This will include the results for Homebase from 1 March 2006
(approximately 12 months) and the results for the rest of the Group from 1 April
2006 (approximately 11 months). As previously announced, based on the actual
trading performance for March 2006, it is estimated that the impact of not
reporting the period 4 March 2007 to 31 March 2007 on the results for the year
just ended will be a reduction of approximately £23m in terms of Group benchmark
operating profit.

To assist with analysis and comparison, pro forma results for the 52 weeks to
3 March 2007 will be provided as part of the Preliminary Results to be announced
on 2 May 2007. Attached at Appendix 1, we have set out the basis of preparation
for the pro forma restatements. At Appendix 2 and 3, we have provided restated
results for the 26 weeks to 2 September 2006 and the 52 weeks to 4 March 2006
respectively. A summary of the restated pro forma results is as follows:

H1 2006/07 pro forma results           6 months to      Pro forma    26 weeks to
                                      30 Sept 2006    restatement    2 Sept 2006
£m
Sales                                      2,819.9        (163.5)        2,656.4
Benchmark operating profit                   106.9          (5.2)          101.7
Net interest income                            5.7          (0.2)            5.5
Benchmark PBT                                112.6          (5.4)          107.2
Basic benchmark EPS                           8.7p         (0.4p)           8.3p


FY 2005/06 pro forma results          12 months to      Pro forma    52 weeks to
                                     31 March 2006    restatement   4 March 2006
£m
Sales                                      5,548.0         (37.7)        5,510.3
Benchmark operating profit                   337.7          (5.9)          331.8
Net interest income                            n/a            9.5            9.5
Benchmark PBT                                  n/a            3.6          337.1
Basic benchmark EPS                            n/a            n/a          25.6p


The timing of trading statements will also change as a result of the new
year-end. At Appendix 4, we have provided trading statement comparables on the
new basis.


Enquiries

Analysts and investors (Home Retail Group)

Richard Ashton           Finance Director                     01908 600 291
Stuart Ford              Head of Investor Relations


Certain statements made in this announcement are forward looking statements.
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual events or results to differ
materially from any expected future events or results referred to in these
forward looking statements.

Appendix 1. Basis of preparation for pro forma restatements

Reporting periods

Home Retail Group previously reported on a calendar year-end to 31 March, with
the Interim Results reported as the six months to 30 September. Within this, to
avoid distortion in the financial results relating to the timing of Easter,
Homebase was consolidated on a non-coterminous 12 months to 28 February basis.
At the Interim Results, Homebase was therefore consolidated on a seven months to
30 September basis, with the second half of its financial year comprising only a
five month period.

FY 2006/07

As a result of the change in year-end, Home Retail Group will this year report
on a statutory basis the financial period ended 3 March 2007. This will include
the results for Homebase from 1 March 2006 (approximately 12 months) and the
results for the rest of the Group from 1 April 2006 (approximately 11 months).

FY 2006/07 on a pro forma basis will be the 52 week period commencing
5 March 2006 and ending on 3 March 2007; results on this basis will be reported
as part of the Preliminary Results to be announced on 2 May 2007. The
restatement adjustments on the Group apart from Homebase are illustrated as
follows:

Statutory                                            c.11 months
reporting                                           1 Apr 2006 to
period                                                3 Mar 2007
                                                        
                                                   
Earlier days         27 days
to be            5-31 Mar 2006
included              

Pro forma                                 52 weeks
reporting                               5 Mar 2006 to
period                                    3 Mar 2007
                                         

For Homebase, the restatement adjustments for FY 2006/07 are illustrated as follows:

Statutory                                  c.12 months
reporting                                 1 Mar 2006 to
period                                     3 Mar 2007 
                                           

Earlier days    4 days
to be          1-4 Mar
excluded        2006
               

Pro forma                                   52 weeks
reporting                                 5 Mar 2006 to
period                                     3 Mar 2007
                                          

H1 2006/07

For comparative purposes, H1 2006/07 on a pro forma basis will be the 26 week
period commencing 5 March 2006 and ending on 2 September 2006; the financial
results adjusted to this basis are shown at Appendix 2. The restatement
adjustments on the Group apart from Homebase are illustrated as follows:

Statutory                                             6 months
reporting                                           1 Apr 2006 to
period                                              30 Sept 2006
                                                     
Earlier days         27 days
to be            5-31 Mar 2006
included               

Later days                                                            28 days
to be                                                             3-30 Sept 2006
excluded                                                                  

Pro forma                                  26 weeks
reporting                                5 Mar 2006 to
period                                   2 Sept 2006
                                         


For Homebase, the restatement adjustments for H1 2006/07 are illustrated as
follows:

Statutory                                             7 months
reporting                                            1 Mar 2006 to
period                                               30 Sept 2006 

Earlier days 4 days
to be         1-4
excluded      Mar
              2006

Later days                                                           28 days
to be                                                             3-30 Sept 2006
excluded                                                                   

Pro forma                                 26 weeks
reporting                                5 Mar 2006 to
period                                    2 Sept 2006
                                      

FY 2005/06

For comparative purposes, FY 2005/06 on a pro forma basis will be the 52 week
period commencing 6 March 2005 and ending on 4 March 2006; the financial results
adjusted to this basis are shown at Appendix 3. The restatement adjustments on
the Group apart from Homebase are illustrated as follows:

Statutory                                             12 months
reporting                                            1 Apr 2005 to
period                                                31 Mar 2006
                                                     

Earlier days           26 days
to be                6-31 Mar 2005
included               

Later days                                                            27 days
to be                                                              5-31 Mar 2006
excluded                                                                   

Pro forma                                 52 weeks
reporting                               6 Mar 2005 to
period                                   4 Mar 2006
                                         

For Homebase, the restatement adjustments for FY 2005/06 are illustrated as
follows:

Statutory                       12 months
reporting                      1 Mar 2005 to
period                          28 Feb 2006
                               

Earlier days 5 days
to be         1-5
excluded      Mar
              2005

Later days                                                         4 days
to be                                                             1-4 Mar
included                                                            2006
                                                                  

Pro forma                                   52 weeks
reporting                                  6 Mar 2005 to
period                                      4 Mar 2006
                                            


Central Activities

Central Activities represents the cost of central corporate functions. As part
of GUS, Home Retail Group was not recharged for these types of costs, however
for the purposes of preparing demerger financial information, an approximation
was made of the amount of GUS corporate head office costs to apportion to Home
Retail Group. These apportioned costs were not representative of either the
historical costs Home Retail Group would have incurred or the costs it will
incur going forward.

As part of the pro forma restatements, Home Retail Group has therefore
approximated the additional costs of central corporate functions it would have
incurred over and above that apportioned to it by GUS. This has been done on the
basis it had operated as a standalone plc through the periods being restated.

Capital structure and net interest

As part of the demerger, Home Retail Group was allocated pro forma net debt as
at 31 March 2006 of £200m. For the purposes of preparing pro forma results, net
interest income has been calculated to illustrate the impact on the Group's
financial performance as if this capital structure had existed at 31 March 2006
and had been achieved based on the underlying cash flows prior to 31 March 2006.
The additional net interest costs attributable to the actual GUS capital
structure that was in place over the periods are shown separately.

Other income statement items

Other non-trading income statement items have not been restated as they are not
impacted by the change of year-end. These are principally exceptional items,
financing fair value remeasurements and the financing impact on retirement
benefit balances.


Appendix 2. Restatement of H1 2006/07

                                          6 months to    Pro forma    26 weeks to
                                         30 Sept 2006  restatement    2 Sept 2006

Argos                                         1,794.1       (40.5)        1,753.6
Homebase                                        979.1      (122.3)          856.8
Financial Services                               46.7        (0.7)           46.0
                                           ________________________________________
Sales                                         2,819.9      (163.5)        2,656.4

Cost of sales                               (1,851.2)         94.8      (1,756.4)
                                           ________________________________________
Gross profit                                    968.7       (68.7)          900.0

Operating expenses before exceptional         
items                                         (861.8)         63.5        (798.3)

Argos                                            72.4        (6.0)           66.4
Homebase                                         40.8          1.1           41.9
Financial Services                                4.1        (0.4)            3.7
Central Activities                             (10.4)          0.1         (10.3)
                                           ________________________________________
Pro forma benchmark operating profit            106.9        (5.2)          101.7

Pro forma net interest income (note 1)            5.7        (0.2)            5.5
Share of post-tax results of                        -            -              -
associates
                                           ________________________________________
Pro forma benchmark PBT                         112.6        (5.4)          107.2
                                           ==========
Net interest costs attributable to GUS
capital structure (note 1)
                                               (35.7)            -         (35.7)
                                           ________________________________________
Benchmark PBT                                    76.9        (5.4)           71.5

Exceptional items                              (16.4)            -         (16.4)
Financing fair value remeasurements             (0.9)            -          (0.9)
Financing impact on retirement benefit            
balances                                          6.6            -            6.6
                                           ________________________________________
Profit before tax                                66.2        (5.4)           60.8

Taxation                                       (24.9)          1.8         (23.1)
of which: taxation attributable to
pro forma benchmark PBT                        (36.6)          1.8         (34.8)
                                           ________________________________________
Profit for the period                            41.3        (3.6)           37.7
___________________________________________________________________________________
Pro forma basic benchmark EPS                    8.7p       (0.4p)           8.3p

Basic benchmark EPS                              5.9p       (0.4p)           5.5p

Basic EPS                                        4.8p       (0.5p)           4.3p

Number of ordinary shares for basic            
EPS                                            869.0m            -         869.0m
___________________________________________________________________________________


Note 1: net interest

Pro forma net interest expense                  (2.6)        (0.5)          (3.1)
Financing costs charged to Financial             
Services                                          8.3          0.3            8.6
                                           ________________________________________
Pro forma net interest income                     5.7        (0.2)            5.5

Interest costs attributable to GUS             
capital structure                              (35.7)            -         (35.7)
                                           ________________________________________
Total net interest expense charged in
benchmark PBT                                  (30.0)        (0.2)         (30.2)

Financing fair value remeasurements             (0.9)            -          (0.9)
Financing impact on retirement benefit            6.6            -            6.6
balances
                                           ________________________________________
Income statement net financing costs           (24.3)        (0.2)         (24.5)
                                           ________________________________________



Appendix 3. Restatement of FY 2005/06

                                         12 months to    Pro forma    52 weeks to
                                        31 March 2006  restatement   4 March 2006

Argos                                         3,892.6       (33.8)        3,858.8
Homebase                                      1,561.8        (2.8)        1,559.0
Financial Services                               93.6        (1.1)           92.5
                                           ________________________________________
Sales                                         5,548.0       (37.7)        5,510.3

Cost of sales                               (3,686.5)         31.9      (3,654.6)
                                           ________________________________________
Gross profit                                  1,861.5        (5.8)        1,855.7

Operating expenses before exceptional       
items                                       (1,523.8)        (0.1)      (1,523.9)

Argos                                           296.0          1.0          297.0
Homebase                                         51.8        (0.4)           51.4
Financial Services                                6.1            -            6.1
Central Activities                             (16.2)        (6.5)         (22.7)
                                           ________________________________________
Pro forma benchmark operating profit            337.7        (5.9)          331.8

Pro forma net interest income (note 1)            n/a          9.5            9.5
Share of post-tax results of                    
associates                                      (4.2)            -          (4.2)
                                           ________________________________________
Pro forma benchmark PBT                           n/a          3.6          337.1

Net interest costs attributable to GUS
capital structure (note 1)                     (31.3)        (9.6)         (40.9)
                                           ________________________________________
Benchmark PBT                                   302.2        (6.0)          296.2

Exceptional items                              (24.7)            -         (24.7)
Financing fair value remeasurements             (2.4)            -          (2.4)
Financing impact on retirement benefit            
balances                                          2.6            -            2.6
                                           ________________________________________
Profit before tax                               277.7        (6.0)          271.7

Taxation                                       (96.9)          2.0         (94.9)
of which: taxation attributable to

pro forma benchmark PBT                           n/a          n/a        (114.5)

Profit for the period                           180.8        (4.0)          176.8
                                           ________________________________________

___________________________________________________________________________________
Pro forma basic benchmark EPS                     n/a          n/a          25.6p

Basic benchmark EPS                             22.8p       (0.5p)          22.3p

Basic EPS                                       20.8p       (0.5p)          20.3p

Number of ordinary shares for basic            
EPS                                            869.0m            -         869.0m
___________________________________________________________________________________


Note 1: net interest

Pro forma net interest expense                    n/a        (8.3)          (8.3)
Financing costs charged to Financial              
Services                                          n/a         17.8           17.8
                                           ________________________________________
Pro forma net interest income                     n/a          9.5            9.5

Interest costs attributable to GUS             
capital structure                              (49.2)          8.3         (40.9)
Financing costs charged to Financial            
Services                                         17.9       (17.9)              -
                                           ________________________________________
Net interest costs attributable to GUS
capital structure                              (31.3)        (9.6)         (40.9)
                                           ________________________________________
Total net interest expense charged in
benchmark PBT                                  (31.3)        (0.1)         (31.4)

Financing fair value remeasurements             (2.4)            -          (2.4)
Financing impact on retirement benefit            
balances                                          2.6            -            2.6
                                           ________________________________________
Income statement net financing costs           (31.1)        (0.1)         (31.2)
                                           ________________________________________


Appendix 4. Restatement of trading statement comparables

                                               Q1
                                      13 weeks to
                                      3 June 2006
Argos
Sales                                       £855m
Like-for-like change in sales                6.1%
Net new space contribution to sales          
change                                       8.0%
                                    _____________
Total sales change                          14.1%
                                    _____________
Guidance on gross margin movement   Down c.100bps

Homebase
Sales                                       £441m
Like-for-like change in sales              (4.7%)
Net new space contribution to sales          
change                                       3.6%
                                    _____________
Total sales change                         (1.1%)
                                    _____________
Guidance on gross margin movement     Up c.200bps

                                               Q2               H1
                                      13 weeks to      26 weeks to
                                      2 Sept 2006      2 Sept 2006
Argos
Sales                                       £899m          £1,754m
Like-for-like change in sales                4.5%             5.1%
Net new space contribution to sales          
change                                       6.3%             6.9%
                                    _______________  _____________
Total sales change                          10.8%            12.0%
                                    _______________  _____________
Guidance on gross margin movement   Down c.100bps    Down c.100bps

Homebase
Sales                                       £416m            £857m
Like-for-like change in sales              (1.5%)           (3.2%)
Net new space contribution to sales          
change                                       4.6%             4.1%
                                    _______________  _____________
Total sales change                           3.1%             0.9%
                                    _______________  _____________
Guidance on gross margin movement     Up c.150bps      Up c.200bps

                                               Q3              YTD
                                      18 weeks to      44 weeks to
                                       6 Jan 2007       6 Jan 2007
Argos
Sales                                     £1,873m          £3,627m
Like-for-like change in sales              (0.1%)             2.5%
Net new space contribution to sales          
change                                       4.5%             5.6%
                                    _______________  _____________
Total sales change                           4.4%             8.1%
                                    _______________  _____________
Guidance on gross margin movement      Up c.50bps     Down c.25bps

Homebase
Sales                                       £519m          £1,376m
Like-for-like change in sales              (2.8%)           (3.0%)
Net new space contribution to sales          
change                                       3.0%             3.6%
                                    _______________  _____________
Total sales change                           0.2%             0.6%
                                    _______________  _____________
Guidance on gross margin movement     Up c.350bps      Up c.250bps

                                               Q4               H2              FY
                                       8 weeks to      26 weeks to     52 weeks to
                                       3 Mar 2007       3 Mar 2007      3 Mar 2007
Argos
Sales                                       £537m          £2,410m         £4,164m
Like-for-like change in sales                3.0%             0.8%            2.4%
Net new space contribution to sales          
change                                       3.8%             4.4%            5.5%
                                      ____________     ____________    ____________
Total sales change                           6.8%             5.2%            7.9%
                                      ____________     ____________    ____________
Guidance on gross margin movement      Up c.50bps       Up c.50bps         c.0 bps

Homebase
Sales                                       £218m            £737m         £1,594m
Like-for-like change in sales                9.9%             0.6%          (1.4%)
Net new space contribution to sales          
change                                       3.4%             3.1%            3.6%
                                      ____________     ____________    ____________
Total sales change                          13.3%             3.7%            2.2%
                                      ____________     ____________    ____________
Guidance on gross margin movement     Up c.500bps      Up c.400bps     Up c.300bps




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