Homebase's new Aussie owner sizes up its big fix

The new owner of Homebase today laid bare the scale of the task it faces to turn around the business, revealing the DIY chain fell into the red in its first half.

Homebase, bought by Australia’s Wesfarmers for £340 million last year, recorded a loss before interest and tax of £28 million in the last six months of 2016.

Sales at the division, which is being rebranded Bunnings, reached £612 million, compared with £320 million in the first quarter.

Wesfarmers’ outgoing boss Richard Goyder said earnings were hit by “necessary restructuring, including clearance of deleted lines and high levels of price deflation associated with the move to [its strategy] ‘Always Low Prices’ ”.

Wesfarmers pledged to invest £500 million in the chain in a direct challenge to rival B&Q. Its first converted store, a large-format Bunnings Warehouse, opened in St Albans this month.

It plans to go back to basics, focusing on staff training and lowering prices, and bring its “sausage sizzle” barbecue events to the UK.