End of Year Trading Statement

Home Retail Group Plc
14 March 2007


                                                                   14 March 2007

                             Home Retail Group plc
                         End of Year Trading Statement


Home Retail Group, the UK's leading home and general merchandise retailer, today
announces details of the short trading period comprising the eight weeks to
3 March 2007.


Terry Duddy, Chief Executive Officer of Home Retail Group, said:


'This short trading period to the end of our new financial year-end has seen a
performance ahead of our expectations. We now expect profits on a 52-week
pro forma basis to be slightly above the current market consensus, driven
principally by Argos. While we are pleased with the most recent performance and
the likely outturn for the financial year just completed, we remain cautious on
a retail environment that is still expected to be challenging.'



% change in sales year-on-year                                                      Statutory
                                                   8 weeks           22 weeks            year
                                                   to 3 March        to 3 March   to 3 March*

Argos
Like-for-like change in sales                        3.0                0.9            2.3
Net new space contribution to sales change           3.8                4.0            5.5
Total sales change                                   6.8                4.9            7.8

Homebase
Like-for-like change in sales                        9.9                1.2          (1.4)
Net new space contribution to sales change           3.4                2.9            3.6
Total sales change                                  13.3                4.1            2.2

* 1 April 2006 to 3 March 2007 for Argos and 1 March 2006 to 3 March 2007 for
Homebase


Argos
Argos grew its total sales by 6.8% in the final eight weeks of the financial
year. The like-for-like sales increase of 3.0% was driven by continued strong
growth in televisions and video games systems. Total Internet sales grew by 37%,
led by Check & Reserve, while home delivery grew to represent 24% of total
sales. Gross margin was slightly ahead versus the comparable period, driven by
ongoing supply chain initiatives and improved management of stock clearance
activity; gross margin for the full year was in line with the prior year.


The contribution to sales growth from net new space was 3.8%; the number of
stores at 3 March 2007 was 680, a net increase of 25 stores from 4 March 2006.
As previously announced, Argos expects to open a similar number of stores in the
coming year. However, the contribution to sales growth will be lower than the
year just finished which benefited in the first half of the year from the 33
acquired Index stores, as well as the larger total sales base.


Homebase
In what is the lowest volume trading period of the year and against the weakest
comparatives of the previous year, Homebase's total sales grew by 13.3% in the
final eight weeks. Like-for-like growth was led by stronger performances in big
ticket categories as well as good growth in garden maintenance. Gross margin
continued to be strongly ahead, driven by ongoing supply chain initiatives and
improved stock management.


The contribution to sales growth from net new space was 3.4%; the number of
stores at 3 March 2007 was 310, a net increase of 13 stores from 4 March 2006.
As previously announced, Homebase expects to open a similar number of stores in
the coming year. However, the contribution to sales growth is expected to be
significantly lower than the year just finished as a result of the planned
phasing and size of store openings.


Year-end cash position
Home Retail Group now estimates that it will report a modest net cash position
as at 3 March 2007. This has been driven by the Group's improved profit
performance in the second half, delayed capital expenditure into the next
financial year and the timing of working capital flows in relation to the change
of year-end.


Change of year-end
As previously announced, Home Retail Group has changed its year-end. The Group
will this year report on a statutory basis the financial period ended 3 March
2007. To assist with analysis and comparison, pro forma results for the 52 weeks
to 3 March 2007 will also be provided as part of the Preliminary Results to be
announced on 2 May 2007.


Today, as a separate announcement, we have provided details on the basis of
preparation for the pro forma restatements, together with restated results for
the 26 weeks to 2 September 2006 and the 52 weeks to 4 March 2006. The timing of
trading statements will also change as a result of the new year-end; trading
statement comparables on the new basis have also been provided in the separate
announcement.


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
£m                                    30 Sept 2006    Restatement    2 Sept 2006
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
£m                                   31 March 2006    restatement   4 March 2006
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




Enquiries

Analysts and investors (Home Retail Group)
Richard Ashton             Finance Director                 01908 600 291
Stuart Ford                Head of Investor Relations


Press (Finsbury)
Rollo Head                                                  020 7251 3801
Alice Macandrew



There will be a conference call for analysts and investors to discuss this
trading statement at 8.30am this morning. The call can be listened to live on
the Home Retail Group website www.homeretailgroup.com. An indexed replay will
also be available on the website later in the day.


Information in this announcement is based upon unaudited management accounts. In
addition, certain statements made 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





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