Homebase owner Wesfarmers sees profits down 86.6%

The costs of overhauling UK DIY business Homebase contributed to a huge slump in profits for its Australian owner in the second half of last year.

Wesfarmers bought the retailer in 2016 and is in the process of rebranding outlets as Bunnings - a popular chain in its home market.

But the "rapid repositioning" hurt the bottom line, with profits down 86.6%.

Earlier this month Wesfarmers said 40 Homebase stores could be closed, putting up to 2,000 jobs at risk.

UK retailers are struggling in the face of rising inflation and fragile consumer confidence.

Wesfarmers confirmed that five loss-making Homebase branches were closed between July and December.

But it added it was hopeful business would improve during the UK spring and summer.

The conglomerate, which also owns Australian supermarket giant Coles, posted profits of 212m Australian dollars (£119.3m; $166.8m) for the half, compared with A$1.6bn a year earlier.

That decline was largely the result of a A$931m writedown at Homebase, which reflected rebranding and trading worries together with "a moderated outlook" for the business.

Despite the profit slide, Wesfarmers' Sydney-listed shares finished up 3% as investors looked at signs of a recovery in the firm's core supermarket business in Australia.