Homebase has provided a trading update for the year to 27 December 2020, reporting that their turnaround is successfully completed, and they are now into a three year growth plan. In 2020, they generated £61m of EBITDA (before exceptionals), like for like sales growth was +11.3%, gross margin showed strong improvements by 2.6%, and they had a cash balance of £84.7m at year end.VIEW HOMEBASE 2020 ACCOUNTS2020 Review - Summary (all extracted from the Homebase 2020 accounts)
- EBITDA before exceptionals of £61m compared to £4.1m in 2019
- This ‘marks the conclusion of the … turnaround strategy that started in June 2018 and the beginning of a three year growth plan”
- Like for like sales were up 11.3% and gross margin improved by 2.6%
- The year ended with 135 stores trading with 11 stores closing during the year
- Stores were shut for six weeks over the crucial Easter trading period in March/April 2020.
- Turnover was £738.1 down by -4.9% from £775.8 in 2019.
- During the pandemic the business accessed the Job retention scheme, business rates relief and deferred VAT payments (the VAT payments will be repaid by January 2022).
- In June 2020, the company concluded the CVA with 99.8% of creditors voting in favour.
- A potential sales process was initiated towards the end of 2020. “It is not intended that the strategy should change if a new owner is found. Should a suitable partner not be found the Company will continue on its current growth path with the existing owners.”
2020 Format Review
- Since May 2020, customer demand has been strong in key ranges.
- Over 5,500 new products launched in 2020.
- New partnerships formed with House beautiful and Country Living across kitchens, furniture and garden structures.
- In September 2020, a new partnership was signed with The Hut Group to provide the online offer and a new website launched in March 2021.
- During 2020, two new store format high street stores were opened: “Decorate by Homebase” and “Homebase Kitchens and Bathstore”
- By the end of 2020, 104 Homestore stores had the Bathstore format fitted.
2021
- Kitchen & bathroom showrooms were closed for part of the year due to Covid restrictions, impacting the traditionally strong sales period of January & February.
- “Despite the third national lockdown … the Company has been able to meet the budget it set”.
Finances
- At 27 December the Group had net assets of £116.1m (2019: £71.4m) and a cash balance of £84.7m (2019: £17m).
- The company has a debt facility from Wells Fargo that runs until November 2021 of £95m at peak trading. Negotiations are underway to extend access to liquidity should it be required. The Group has access to a further £25m standby debt facility. Maximum utilisation in 2020 was just over £36m.
