The DIY sector is under pressure

It comes after B&Q last month said the home improvement market was sluggish.

GUS, which plans to split in two later this year, also saw no underlying growth at its chain of Argos retail stores in the second half of 2005/06.

But it said credit checking firm Experian was still growing strongly, with a growth in US business of 35%.

Demerger timetable

"We continue to remain cautious on the outlook for UK retailing, especially in DIY," GUS chief executive John Peace said.

GUS BUSINESSES ARGOS RETAIL GROUP: Includes the Argos Retail chain (more than 650 stores and sales of about �4bn), the Homebase DIY chain (nearly 300 stores and sales of more than �1.5bn) and ARG Financial Services EXPERIAN: Employs 12,000 people in 31 countries. Headquarters in Nottingham and in Costa Mesa, California. Annual sales of more than �1.5bn See GUS's share price

GUS said the DIY market continued to weaken despite increased promotional activity.

However, GUS said its Experian business was performing extremely well.

"Experian has delivered record sales growth in the year just ended, with a good balance between organic and acquired growth," GUS chief executive John Peace said.

In February, GUS set a timeframe of six to 12 months to demerge the Argos Group - which includes the Argos and Homebase chains - from Experian, giving them independent stock market listings.

The move is the final step in the break up of the GUS group. Last year, it demerged the fashion house Burberry.

.