UK DIY company Homebase contributed to a sharp fall in profits for its Australian owner Wesfarmers Limited (ASX:WES) in the second half.
Wesfarmers, which bought Homebase in 2016, posted an 87% drop in profits to AU$212mln from AU$1.6bn a year earlier. The decline reflected an AU$931mln writedown on its investment in Homebase.
Wesfarmers, which also owns Australian supermarket chain Coles, said it was reviewing its backing of Homebase and would provide further details in July.
Rebranding
Five loss-making Homebase branches were closed between July and December and Wesfarmers said earlier this month that it would close another 40 stores.
The company has been rebranding Homebase outlets as Bunnings, a popular chain in Australia, but this led to higher costs in the second half.
Homebase, like other retailers, has been hit by weaker consumer confidence as higher inflation puts a squeeze on disposable incomes.