Home Retail Group has upgraded its full-year profit forecast after experiencing better-than-expected Christmas trading at its Argos and Homebase chains.

Home Retail Group said that profits for the year to February 27 would surpass the City forecasts of £265 million by £20 million.

The company said its comparable sales jumped 0.1 per cent at Argos and 4 per cent at Homebase during the 18-week period ended January 2.

Total sales at Argos climbed 3.9 per cent to settle at £1.9 billion, while total sales at Homebase advanced 4.6 per cent to settle at £501 million during the same period.

Toys’ sales at Argos during Christmas were excellent but growth in that area was offset by weakness in video games.

Commenting on the topic, Home Retail Group CEO Terry Duddy said, “The toy performance in Argos was fantastic. To some extent that offset video games, which went backwards. That was a big see-saw.”

Nonetheless, the company is still cautious about the future. It believes future trading conditions to remain challenging in the coming financial year.