New Homebase owner Wesfarmers reveals £28m loss in UK
The new Australian owner of DIY chain Homebase has revealed a £28 million loss in the UK amid a rebrand and moves to slash prices.
Retail giant Wesfarmers, which snapped up Homebase in a £340 million deal last year, said the half-year pre-tax losses came as it counted the cost of a restructure and launched its Always Low Prices pledge.
The group owns DIY chain Bunnings in Australia and is rolling out the brand in the UK, opening the first store in Hertfordshire earlier this month as it rebrands former Homebase sites.
Wesfarmers said it made £612 million in UK revenues over the six months to the end of December, with like-for-like transactions up 9.1% in "steady" trading despite disruption since the Homebase takeover.
But it recorded losses in the UK after taking £13 million of restructure costs and seeing "significant" price falls from its Always Low Prices launch and clearance sales for lines being axed.
The group said it has "moved at pace" with its UK plans, and has "made very good progress to separate Homebase from its former owner and begin repositioning the business".
Its overhaul has also seen Bunnings UK launch new ranges in Homebase and secure fresh supplier agreements.
New kitchen, bathroom and flooring ranges are being planned by the summer.
It cheered the early success of its Bunnings Warehouse store in St Albans, with plans for four more pilots over the financial year as part of a £500 million investment.
A total of 10 stores could be open by the end of the year.
The group said it planned to have the UK business as "well-positioned as possible" for the key spring and summer DIY season.
The conglomerate kept 258 Homebase stores as part of the multimillion-pound deal struck with Argos owner Home Retail Group in February last year.
Home Retail Group was bought by Sainsbury's months later for £1.4 billion.
Wesfarmers has a market valuation of almost £27 billion, and is the largest private sector employer in Australia with around 220,000 staff.
Independent retail analyst Nick Bubb said: "It's early days yet for Bunnings in the UK with Homebase, but trading performance seems to have worsened as the business gets 'back to basics'."
The wider Wesfarmers group posted a 15.1% rise in overall underlying earnings to 2.4 billion Australian dollars (£1.5 billion) for its first half.