In what is being viewed as a good sign in the times of recession and economic downfall, UK based Home Retail Group PLC reported a first half net profit on Wednesday after booking hefty write-downs in the prior-year period.

The result is being seen as a positive effect of the company's steps of cutting costs and improving its product offering to deliver earnings in line with market expectations.

Like most other nonfood retailers in the UK, the operator of Argos and Homebase Stores had been hurt by the recent economic downturn. Customers cut back on spending and the situation was countered by the company by offering better products at slashed prices. Argos is a chain of general merchandise stores, while Homebase offers home improvement products.

The retailer's recent reports showed sales in the 6 months to August 30 up 3% to 2.81 million pounds, helped by new store openings, while sales from stores open one year fell 2% at Argos and 3% at Homebase. Also, analysts and investors assessing the group's underlying performance found that it rose 1% to 122.7 million pounds, boosted by Homebase, which benefited from good weather and tight cost controls.

Chief Executive Terry Duddy shared, "We continue to plan cautiously for consumer demand over the remainder of the financial year, and there will also be a more significant impact from adverse currency movements during this period".

The company has been tightly managing capital expenditure and working capital to improve its cash flow and generated 68 million in cash in the first half, ending the period with 352 million pounds.