Homebase records operating loss as revenues drop by 8%

THE Irish arm of the British-owned Homebase last year recorded an operating loss as revenues dropped by 8% to €61.9m.

Accounts filed by Homebase House and Garden Centre Ltd show revenues last year dropped from €67.5m to €61.9m in the year to the end of February.

The figures show that the company recorded an operating loss of €97,000 after making an operating profit of €41,000 in 2009.

Finance expenses of €1.1m contributed to the company having a pre-tax loss of €1.2m last year.

This followed a pre-tax loss of €38.2m in 2009. This loss arose mainly from an exceptional cost of €38m relating to fixed asset write-downs and onerous lease provisions during the year. However, no write-down was recorded last year resulting in the much smaller pre-tax loss.

The loss resulted in the company’s accumulated losses last year totalling €31.9m. Cost of sales fell from €32.6m to €31.1m and net operating expenses fell from €35.2m to €30.9m. The figures show numbers employed declined by 26 from 649 to 623 with staff costs static at €12.5m.

The company opened an additional store last year. That makes the total 15. The directors say no openings are planned in the next financial year.

The directors state: “Given the particularly challenging market conditions, the focus over the year was on cost control while continuing to drive operational standards, customer engagement and shelf shock availability.”

The directors felt that against the difficult economic background, like-for-like sales during the year were down 11% with the opening of the new outlet resulting in an 8% decrease.

They state: “Revenue has been stimulated through the targeting of media spend to local markets, radio and press advertising, increased promotional activity and by price reductions and sales.”

“The challenging retail environment is anticipated to continue throughout 2010 as unemployment is forecast to further increase and pressure on disposable income becomes more pronounced.”

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