Home Retail hit by impairment charge from Sainsbury's takeover

The loss compares with a £93.8m profit in the year to February 2015. Sales fell 1% to £5.68bn, with revenues from Argos flat and the Homebase do-it-yourself chain down 3%.

Benchmark pre-tax profits, which exclude one-ff items, were £94.7m, down 28%, but ahead of the company's own forecast.

Homebase was sold to Australian retail giant Wesfarmers for £340m and will be rebranded under the Bunnings banner. Home Retail said the deal was completed in February with £337m already received and the balance coming in 2017.

Chief executive John Walden said the company finished the year with a cash balance of £623m, which was “significantly stronger than previously anticipated”.

Home Retail in April recommended the 171.5p a share offer by Salisbury's, which includes 0.321 in Sainsbury's shares, 55p in cash, 25p a share reflecting a £200m planned return to shareholders from the Homebase sale, and 2.8 pence in lieu of the Home Retail final dividend.