Interim group profits at the general merchandise and DIY retailer soared 40 per cent to £149.8 million on sales up 3 per cent to £2.74 billion, powered by Argos.

Home Retail chief executive Terry Duddy hailed a strong performance. He was cautious about the outlook, but said both divisions should benefit from enhanced customer offers and synergies.

Hold, advised Landsbanki. The broker said profits were ahead of expectations, but noted: “If the spate of interest-rate rises is ever to take effect and depress consumer demand, one might expect Home Retail’s businesses to be among those to suffer.”

Pali International, neutral, said first-half results were “excellent”, but asked: “Is this as goods as it gets? Competition from Tesco Direct and B&Q will increase next year, just as the housing market starts to come under pressure.”

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