Homebase profits down 50 per cent due to weather
THE harsh winter weather and the squeeze on household incomes have sent a chill through profits at DIY retailer Homebase.
When parent company Home Retail Group reports full-year results this week, it is expected to say that earnings at Homebase have crashed by nearly 50 per cent. The DIY chain is forecast to see profits fall from £23 million to £12 million, the second consecutive year that profits have dropped by about 50 per cent.
Peter Saville, partner at restructuring firm Zolfo Cooper, said: “Homebase is reliant on big-ticket purchases and continuing economic uncertainty and inflation pressure on disposable income means that, for many customers, such purchases remain on an indefinite hold.”
Homebase is reliant on big-ticket purchases and continuing economic uncertainty
Last October, Homebase announced that it would invest in a new store format, online growth and new brands such as Habitat as part of a turnaround plan for the business. Its store in Ruislip was refitted in October last year and customer feedback has been “excellent”.
Pre-tax profit at Home Retail Group, which also owns Argos, is forecast to fall from £102 million to £90 million.
However, Argos itself is set to see earnings swell by £94 million to £101 million after a strong fourth quarter.