Homebase has been left holding up to £30 million in unsold stock after the dismal summer weather reduced its second-quarter sales by 8 per cent.

Terry Duddy, the chief executive of Home Retail Group, the owner of both Homebase and Argos, said today that one of the wettest British summers resulted in a 20 per cent slump in sales of the DIY chain's seasonal-related items such as deckchairs and garden tables.

Total sales for Homebase's 13 weeks to 1 September fell from £463 million to £391 million during the first quarter.

Homebase will store between £20 million and £30 million of unsold items over the winter, to be sold next year, although Mr Duddy said he was confident that he could sell the items at "at full price" and the division’s first-half profits would be just above the bottom of City expectations of £40 million.

Mr Duddy said today that the company was still selling expensive kitchens and was confident that Home Retail Group would surpass last year’s profits, sending the company’s shares up 3.37 per cent to 414.75p.

He said: "For the first half overall, helped by good gross margins and cost control, profits will still be ahead of last year."

In contrast to Homebase, same-store sales at Argos increased by 1.8 per cent over June, July and August this year as shoppers piled into mobile phones, video games and promotional offers.

Mr Duddy said: "Instinctively, you would say that one of the benefits of having to stay in means that families probably spent more on flat-panel TVs.

"There might be a contrary opportunity [for Argos] when we are slightly down on outdoors. Homebase does not have the same potential for that netting affect."

Total second-quarter Argos sales, including new stores, rose from £893 million during the first quarter to £942 million.

Mr Duddy said that he was expecting "strong growth" in first-half profits from Argos, above the £70 million and £90 million range set by analysts.

Argos is on course to roll out another 30 stores this year.

Homebase's plans for 15 more outlets this year, Mr Duddy said, "would definitely be back-ended. To date we have not made much progress. We have opened two or three so far."

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