Argos and Homebase see profits fall

The Home Retail Group has observed a fall in its 12-monthly profit of just beneath 10%. The group who own Argos and Homebase have submitted full year profits of £265.2m which has been envisioned as the group had posted a profit warning last month, the firm reports revenue had fallen 2.8% to £5.85bn along with the cash gross margin fell 4% to £2.18bn. During the past year they saw a profit of £292.9m even so the DIY marketplace that Homebase competes in has been reducing.

A significant proportion of the Property Retail Group’s business is transferring to internet retail, reaching practically 50 % of all sales within the case of Argos. Argos is all so establishing a shopping channel to contend within the home buyer marketplace.

The group also have cut the costs of distribution and operation by 3%. Share costs remain around the 200p mark with a rise of 5% in early trading.

Home Retail Group chairman Oliver Stocken said:

"Economic uncertainty as well as a low level of consumer confidence continue to adversely impact customer spending patterns, despite these challenges, the group continues to construct on its strategic advantages to guarantee that it will be well-positioned for the economic recovery over the longer term."

Banks still losing money, crisis not over yet

Reminder: the financial crisis is anything but over. This is underlined by the fact the Royal Bank of Scotland posted a £1.1 billion loss.

While the loss is particularly linked to Ulster Bank, which is a RBS subsidiary and has guaranteed 100% mortgages in the Irish Republic, it demonstrates how the European banking system is still in crisis.

We still have issues of denial about the extent of problems in the Irish Republic, not least triggered by the European bond crisis which affected Ireland. And there are continued policy fights within the European Central Bank as to whether existing securities are enough, or whether a sea-change in fiscal policy is required which would see the ECB buying up European sovereign bonds.

In the meantime, everyone else seems to have forgotten that we haven't yet faced down the threat of a sovereign bond crisis in Europe. While there is a degree of optimism in the markets at present, it's worth noting that Portugal may yet require a bail-out, and if that happens then Spain is almost certainly next as the sovereign bond crisis slowly but surely unfolds.

And here's the elephant in the room - if UK property begins to fall in price as all trend indicators suggest they must, then you can expect a new round of financial problems to adversely impact Britain's banks, and our economy with it.

And then, of course, there are public sector cuts looming.

The financial crisis is anything but over yet.