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Argos owner Home Retail has recorded a 40 per cent rise in first-half pre-tax profits as sales at its catalogue business boosted its performance.

In a statement today the household goods retailer revealed that its benchmark profit before tax for the 26 weeks to September 1st was £149.8 million, up from a pro forma of £107.2 million a year ago.

Overall sales climbed by three per cent to £2.74 billion, with higher sales at Argos offsetting a disappointing performance by Home Retail's DIY chain Homebase.

Argos' like-for-like sales were up 1.4 per cent over the first-half, but down by 2.5 per cent at Homebase as a result of adverse weather conditions affecting trade.

Home Retail, which says that the trialling of its Argos business in India is going to plan, launched the high street store's biggest ever catalogue in July. The latest Argos catalogue has 18,100 lines, some nine per cent more than last year, Home Retail stressed.

In addition to the inclusion of a wider selection of product categories and ranges Argos has also lowered prices in order to attract customers. Home Retail said that the overall price reduction achieved in the current catalogue offered by the business is around five per cent across the 8,000 lines that have been reincluded.

Home Retail said lower prices had been funded by the growing scale of the business and ongoing supply chain initiatives.

Meanwhile the group emphasised that continued improvements to Homebase's gross margin had offset weak market demand, with the poor weather having hit sales of the DIY firm's seasonal ranges.

Commenting on the results Home Retail chief executive Terry Duddy said: "The group has performed very strongly in the first half, both from an operational and financial point of view.

"There was a particularly good result at Argos with profit growth of 50 per cent, while Homebase grew profits by 12 per cent despite some difficult market conditions."

Mr Duddy added that Home Retail remains cautious given the "uncertain consumer outlook", but stressed that both Argos and Homebase were continuing to enhance their customer offers as the key Christmas trading period approaches.