Home Retail Group, which runs Argos and Homebase stores, has reported a £31m boost – a third of its total annual net profit – from closing its defined benefit scheme. The windfall follows the closure of its scheme to future accrual from January 31, following a triennial valuation showing a £158m deficit at the end of last March.

The company’s year end accounts show closing the scheme resulted in a one off gain of £37.4m as a result of the reduction in liabilities from members who were no longer entitled to pension benefits linked to future salary increases. This was offset by costs of closing the scheme of £6.1m. The gain contributed to a £30.2m fall in the scheme deficit.

Despite this, the IAS 19 valuation as at March 2, 2013, showed the scheme maintained a net deficit of £85.1m. An increase of £69.1m in scheme assets to £833.5m was partially offset by an increase of £38.9m in the present value of scheme liabilities, driven principally by an increase in the assumed rate of inflation to 3.4 per cent (up from 3.1 per cent in 2012).

The financial year saw the company make deficit recovery payments of £8m to the scheme.

Pre-tax profits at the group also still fell from last year, down 10 per cent to £91m, with earnings per share down 11% to 7.7p.

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