Homebase Ireland returns to profit following lease renegotiation

The renegotiation by DIY chain Homebase of a number of property leases here in its recent examinership has resulted in the firm booking a €33m gain.

Newly filed accounts for the Irish operations of the British-owned home improvement retailer show that the firm recorded a pre-tax profit of €27.57m in the 12 months to the beginning of March 2013. This followed the firm recording an €8.1m pre-tax loss in the previous year.

The chief factor behind the return to profit for Homebase House and Garden Centre Ltd was the firm booking the €33m gain, as a result of terms in a number of property leases being renegotiated in the examinership in a post-balance sheet event.

Almost 500 jobs were saved last October after the Irish arm of the DIY chain exited High Court examinership at the end of a three-month process.

A note attached to the accounts states that the renegotiation of property leases in the examinership reduced the level of onerous lease provision by €32.96m.

The firm, which now has 13 stores in Ireland, entered examinership last July after the accounts show that the firm sustained a 14% drop in revenues (from €54m to €46.3m) in its most recent financial year.

The directors’ report blamed the 14% drop on the combination of poor weather conditions and the ongoing difficult market conditions due to the continuing decline in the Irish economy.

The accounts show that the firm recorded an operating loss of €1.8m in 2013 after an operating profit of €280,000 in 2012 before exceptional items are taken into account.

The accounts state that the examinership resulted in two store closures; a number of property leases being renegotiated and further investment in the company.

Numbers employed by the firm last year decreased from 597 to 565, with staff costs reducing from €10.73m to €10m.

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

Source : Gordon Deegan - Irish Examiner
www.irishexaminer.com/business/property-lease-renegotiation-nets-homebase-chain-33m-264468.html