DIY retailer suffers €46m losses

THE Irish arm of the DIY and garden centre retailer Homebase last year plunged further into the red, recording pre-tax losses of €46.1 million.

Accounts filed by Homebase House and Garden Centre Ltd show that the firm sustained the loss after booking a €43.5m impairment and onerous lease charge as a result of the continuing retail downturn.

The €46.1m loss in the 12 months to the end of February 26 this year follows Homebase sustaining a pre-tax loss of €1.26m the previous year.

The filings show that revenues at the firm — which operates 15 outlets across Ireland — last year dropped 5%, from €61.9m to €58.7m.

The company recorded an operating loss of €1.3m before the exceptional cost.

According to the directors’ report, “the focus over the year was on cost control and optimising staff deployment whilst continuing to drive operational standards”.

The company said no new store openings are planned for the foreseeable future — Homebase opened one new store at Navan in the 2010 fiscal year.

The numbers employed by the company at the end of last year totalled 624, with staff costs of €11.6m.

The loss last year takes account of the non-cash depreciation cost of €1.1m.

The filings show that the company recorded a €7.9m property impairment and a €35.5m onerous lease provision charge, which “covers potential liabilities for a number of onerous lease contracts where the projected future trading revenue is insufficient to cover the lower of exit cost or value in use”.

The directors state that the challenging retail environment is anticipated to continue throughout 2011.

“As a result, the company will continue to tightly manage costs,” the report states.

“However, investment in further operational and customer improvements will continue to be implemented and operational standards developed, with an emphasis to ensure that the company remains well positioned to capitalise on the longer term recovery in market conditions in Ireland.”

The directors state that “the company is constantly updating its customer offering and looking to enhance product choice through range reviews that bring in new, improved products”.

The figures show that Homebase had accumulated losses of €76m at the end of last year and net liabilities of €72.8m.

A note attached to the accounts states that intermediate parent, Home Retail Group (UK) has again confirmed its intention to provide financial support for the continuing operation of the company.

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