The digital makeover of retail chain Argos showed signs of bearing fruit today after its owner reported a first improvement in annual profits in six years.

Home Retail Group, which also owns DIY chain Homebase, said its turnaround plan resulted in a 3% rise in Argos's annual sales to £4 billion, while the division's operating profits lifted 12% to £112.3 million in the year to March 1.

Across the group, underlying profits improved 27% to £115.4 million - the first rise in six years - although the figure was lower when including one-off items.

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Some 44% of Argos sales were made over the internet in the year, boosted by its check and reserve service allowing shoppers to collect items in store, as well as from a surge in the use of smartphones and tablets, which now account for 18% of sales.

It has scaled back the print edition of the catalogue in favour of digital versions, while it is also closing or relocating at least 75 stores over the next five years.

Argos added about 9000 new lines during the year, bringing the total to around 43,000 after new arrivals included Emma Bridgewater homewares, Monsoon accessories and Denby kitchenware.