Argos-owner Home Retail, which agreed last month to be taken over by UK supermarket Sainsbury's, today reported a 28% fall in annual profit, reflecting tough markets and increased investment.
The home and general merchandise retailer said it made an underlying pretax profit of £94.7m for the year to February 27, down from the £132.1m made in 2014-15.
However, it beat analysts' average forecast of £93m.
Last month Home Retail's board recommended a £1.4 billion cash and shares bid from Sainsbury's. The deal is expected to complete in the third quarter of this year.
Sainsbury's would have been well aware of market expectations for Home Retail's profit.
Hotel Retail said today that its group sales fell 1% to £5.67 billion. Sales were flat at Argos and down 3% at home improvement retailer Homebase.
Sainsbury's wants Argos to accelerate its growth by creating Britain's largest general merchandise retail business and by expanding its online presence.
In February, Home Retail sold Homebase to Australian group Wesfarmers for £340m. Wesfarmers intends to rebrand the chain as Bunnings and invest £500m refurbishing its 265 stores.
Home Retail said it ended the year with a cash balance of £623m.
t said recommendation of Sainsbury's offer resulted in an exceptional goodwill impairment charge of £852m, leading to a total loss after tax for the 2015-16 year of £808m.
The goodwill, which has remained unchanged for decades, had to be aligned to the value of Sainsbury's offer.