He admitted the soft UK retail market was "one factor" the group was considering in drawing up a timetable for separating Experian.At Argos, sales of housewares, garden ranges and jewellery particularly suffered, although its consumer electronics, white goods and toys ranges all performed well. Mr Tyler said Homebase was taking market share thanks to the introduction of better, cheaper ranges.. "We have to assume this [softness] is set in for the rest of the year We assume it will carry on into 2006 That's what we're planning for," he said. Underlying sales at Argos fell 4 per cent in the first quarter and 2 per cent at Homebase, although gross margins at both businesses remained firm.Mr Tyler held out little hope of trading picking up at either Argos or Homebase, although he said both were outperforming the depressed retail market. Experian's credit checking services were in high demand as both consumers and lenders sought to verify credit histories. "It's difficult to assume it's going to grow as fast as this in the future," Mr Tyler said.Experian's performance contrasted sharply with that of Argos and Homebase, ironically underlining the advantages of being a conglomerate just weeks after GUS's separation pledge.
The group has promised to split itself up, starting by demerging its remaining 66 per cent stake in Burberry, which it plans to do in December. Despite another soft three months for GUS's retail division, analysts rushed to upgrade their profit forecasts for Experian. GUS's shares rose 5 per cent to 901p, reflecting the City's hopes that a sale of the financial services business would command a hefty premium. Analysts at Dresdner Kleinwort Wasserstein raised their estimate for the group's valuation to 1,040pDavid Tyler, the finance director, put Experian's 27 per cent jump in sales (at constant currencies) down to a strong consumer credit market in the US. Shares in GUS soared yesterday after a record quarter for its Experian credit checking business offset a further drop in sales at its Argos and Homebase retail chains. "All our businesses are doing well and we are encouraged by our start to the year," he said O2's shares closed up nearly 2 per cent at 138.75p..
O2's total number of customers in Germany is now more than 8 million, a rise of 33 per cent on the same time last year.In the UK, service revenue growth slowed to 3 per cent, but this was affected by price cuts set down by the industry watchdog, Ofcom. The regulator has ordered mobile phone operators to slash the charges to customers for connecting calls from other networks. The company said that without these cuts, UK growth was 10 per cent.Mr Erskine said he was "increasingly confident" of hitting all growth and margin targets. The group also managed to add 232,000 new customers in the UK in the three-month period, which beat forecasts. Peter Erskine, O2's chief executive, said: "The UK consumer is benefiting from colossal competition in the mobile sector, but there are winners and losers among the operators, which are not all performing equally. From the way we are performing, it is clear we are winning."New customer wins in Germany, where 412,000 people joined the O2 network in the three months to 30 June, helped lift service revenues - all revenues excluding handset sales - by 24 per cent.
