Consumers are spending less on DIY

Underlying annual pre-tax profits at GUS fell 9% to �829m, down from �910m a year earlier, as higher interest rates and rising energy bills hit consumers.

Profits more than halved at Homebase, while GUS said it expected the UK DIY market to remain challenging.

GUS plans to split its retail arm from credit business Experian in October.

Cautious outlook

The move, giving Experian and the Argos Retail Group - consisting of Argos and Homebase - separate stock market listings, will raise about �800m for the company.

We remain cautious about the UK retail market in the short term John Peace, GUS chief executive

Homebase profits fell from �113.8m to �51.8m, but GUS said the business had still outperformed the DIY retail market in general.

GUS said it was cautious about the outlook for the UK retail market looking forward.

"Although we remain cautious about the UK retail market in the short term, we are confident that both Argos Retail Group and Experian have clear strategies for growth in the medium and long term," said John Peace, GUS's chief executive.

In further evidence of the slump in DIY sales, the owner of B&Q said its like-for-like sales fell 8.8% in the first quarter.

Overall profits at Kingfisher's retail businesses fell sharply to �68.4m in the 13 weeks to April 29.