GUS looks at demerging Experian unit

GUS, the owner of Argos and Homebase, yesterday set itself a two-year deadline to decide whether to break itself up as it unveiled plans to return £200m to shareholders.

GUS, the owner of Argos and Homebase, yesterday set itself a two-year deadline to decide whether to break itself up as it unveiled plans to return £200m to shareholders.

John Peace, the chief executive, said the board would review all options for the future of the retail-to-financial services conglomerate from "keeping the group together to some sort of logical separation".

Analysts said GUS was most likely to spin off Experian, its credit-checking arm which is worth up to £4bn. The move should narrow the conglomerate discount the group has with other retailers, one analyst said.

Mr Peace said the group was "under no pressure whatsoever" to demerge or float Experian, insisting it would avoid a "knee-jerk reaction". It plans to take two years to complete the review. Mr Peace ruled out splitting up Argos and Homebase, the do-it-yourself retailer it bought 18 months ago. "We only just put [them] together," he said.

GUS is to return £200m to investors via a share buyback following its decision last November to sell down part of its stake in Burberry, the luxury goods group it spun off in 2002.

Although some analysts had speculated the group could return twice this amount, David Tyler, the finance director, said GUS did not want to jeopardise its credit rating. It has some £2bn of long leasehold liabilities on its balance sheet from its Argos retail estate, he added.

Group pre-tax profits rose 69 per cent to £692m for the year to the end of March. Excluding exceptional gains from selling shares in Burberry and goodwill amortisation, profits rose 29 per cent to £827m, in line with expectations. Its Argos retail arm, which includes Homebase, grew profits by 19 per cent to £416m on sales up 10 per cent.