Analysts give their reaction to Homebase/Bunnings quarterly results

Credit Suisse said Wesfarmers' quarterly result was largely as expected but there was "a poorer than forecast result from the UK and Ireland", while Deutsche Bank said growth slowed.

Credit Suisse added that the UK and Ireland result "was consistent with our thesis of a more significant rebasing of the Homebase business and consequent acceleration of the new Bunnings  format in that market".

Deutsche Bank said: "While it is early days, transaction growth slowed in the UK".

Homebase/Bunnings saw transactions rise 2.2% in its first quarter in results announced on 27 April. Bunnings UK and Ireland has reported third quarter sales of £245m, with £851m in sales for the year to date.

Owners Wesfarmers did not provide a like-for-like sales update as it did not complete the £340m purchase of the Homebase chain from Home Retail Group until February 2016.

Total sales for the quarter (12 week period 2 January 2017 to 26 March 2017) were £245 million ($400 million). On a like-for-like trading basis across the third quarter, customer participation, as measured by transactions, increased by 2.2%. For the financial year to date, total sales were £851 million ($1,429 million). Customer participation for the financial year to date increased by 6.9%.

UK and Ireland managing director PJ Davis said trading during the quarter was negatively affected by the continued repositioning of the kitchen and bathroom offer, while the performance across other core home improvement and garden products was pleasing.

Newly rebranded UK Bunnings stores are opening, with two in St Albans and planned stores in Milton Keynes, Hemel Hempstead and Folkestone among the 255-store estate.


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