Australian conglomerate Wesfarmers, which bought Homebase last February, said it made a pre-tax loss of £28m in the UK in its maiden half-year.
It raked in sales of £612m in the six months to December 31, during which the firm begun converting the Homebase estate into Bunnings stores.
The UK’s first Bunnings Warehouse opened in St Albans earlier this month, with additional pilot stores currently under development.
The retailer’s restructuring work accounts for £13m of its pre-tax loss during what is the seasonally weaker six months of the year for UK DIY firms.
Commenting on business in the UK and Ireland, Wesfarmers’ outgoing managing director Richard Goyder said: “Bunnings has moved at pace, making solid progress on phase one of its transformation plan.
“Earnings were affected by necessary restructuring, including clearance of deleted lines and high levels of price deflation associated with the move to ‘Always Low Prices’.
“Bunnings has made very good progress to separate Homebase from its former owner and begin repositioning the business.”
In its first quarter – the 13 weeks to September 25 – sales at Homebase came in at £320m and, on a like-for-like basis, customer participation as measured by transactions grew 8.4%.
Bunnings lifer PJ Davis is heading up the Homebase conversion project in the UK and Ireland, which is expected to take between 3 and 5 years.
Davis axed zero-hour contracts for all staff and has committed to paying everyone, including those aged under-25, the national living wage.
Meanwhile, DIY rival B&Q has unveiled plans to debut a small-format store, due to open next month.
Wesfarmers group interims
The group, which also owns Target and Coles, registered group profit after tax of AUS$1,577m – up 13.2% year-on-year.
Goyder said: “Total retail earnings were in line with the prior corresponding period, with very strong results reported for Bunnings Australia and New Zealand, Kmart and Officeworks.”