Homebase returns to profit ahead of plan

Homebase has returned to a £3.2 million profit before tax for 2019, compared to a £114.5 million loss in 2018.

Like-for-like sales were up 2.6 per cent and gross margin rate was up 2.8 per cent over the year to 29 December, off the back of improvements both in-store and online.

Nearly all 164 stores are now profitable, with the overall cost base reduced by over £180 million.

Homebase invested £10 million in stores in the UK and Ireland, including 51 refurbishments during 2019, while website investments led to a doubling of online sales, with more than half of customers starting their shopping journey online.

For the third year in a row, Homebase came bottom in the Which? list of 100 online retailers, with shoppers bemoaning its poor customer service and stock availability.

The company secured an asset-based lending facility of up to £95 million from Wells Fargo Capital Finance and its proposed Company Voluntary Arrangement (CVA) should conclude 18-months ahead of schedule due to strong financial performance.

Chief executive Damian McGloughlin commented: “Eighteen months into our turnaround, we’re extremely proud of what our team has achieved, working hard with our partners to return to profit and lay solid foundations for growth.

“We will continue to invest in our ranges, services, and team members as we make Homebase the go to place for the inspiration, expertise and products customers need to take their ideas and create homes they love.”

As for 2020, Homebase promised new store formats, two small standalone stores to be trialled in Cheadle and Sutton, which will be called DECORATE by Homebase.

Continued digital investment will build a marketplace where customers can shop from an additional 18,000 products, while next and named day delivery will be launched in March.

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