DIY retailer Homebase has cut £100million fixed costs, as part of its turnaround plan, following the sale of the business to Hilco.
It has seen the decline of EBITDA losses by nearly £140million to £33million and a 21.8% improvement in gross profit to £217.1million, as reported in its financial results for six months to December 30, 2019.
According to the company it now offers a “stable platform to support future growth”.
The reduction of the fixed cost base has included a head office restructure with 38% job losses, as well as a Company Voluntary Agreement which saw a closure of 47 stores.
Homebase secured rent reductions on an additional 70 stores, and closed two out of its six distribution centres, in line with a reduction of its store estate.
Its financial performance, which has seen the company deliver a turnover of £497.8million, has reportedly been buoyed by enhancing its kitchen and lighting offer, return of in-store concessions such as Silentnight and staff training.
In addition, the company has rebuilt its digital offer, generating a double digit increase in traffic to the Homebase website.
CEO of Homebase Darren McGloughlin said: “After the change in ownership last year, we put a clear plan in place to restructure the business with a clear focus on cost management, better shop keeping and bringing back the things our team and customers love most about Homebase.
“The benefits of the changes we have made are starting to come through and I am extremely grateful for the loyalty, energy and support we have received from our team members and suppliers.
“It is their hard work that has enabled us to put in place these stronger foundations.
“Clearly, we are only 10 months into a three-year turnaround plan. Homebase remains one of the most recognisable retailers in the UK and Ireland, and the progress we have made in reinvigorating our customer experience means we are very optimistic about the future.”
Andy Coleman, CFO of Homebase, said: “Central to our turnaround plan was the need to reduce our cost base through a series of difficult but necessary measures and we have already removed £100m of fixed costs from the business.
“These changes combined with our improved operational execution are already bearing fruit with EDITDA losses declining by nearly £140million in the second half of 2018.
“We are encouraged by the progress we are making on our turnaround plan and believe that we are now have a stable platform in place to support future growth.”