The “poor trading performance” of Homebase since its acquisition by Australia’s Wesfarmers in 2016 has led the parent company to forecast an underlying loss before interest and tax in H1 2018 of £97m.

Wesfarmers MD Rob Scott says: “The Homebase acquisition has been below our expectations, which is obviously disappointing. It is clear that a significant amount of change has been driven through Homebase since the acquisition and the disruption caused by the rapid repositioning of the business has contributed to greater than expected losses across the Homebase network.

“Sales have been affected as non-core categories and concessions were exited ahead of the implementation of the Bunnings format, and investments in price and new ranges have not offset these lost sales. Trading was particularly weak during the latter part of the first half of the 2018 financial year.

“We will take a disciplined approach to further capital deployment in Bunnings United Kingdom and Ireland (BUKI) and provide an update on the outcomes of the business review and our plans for a broader conversion to Bunnings at our Strategy Briefing Day in June.”

Former BUKI MD Peter J Davis has announced that he plans to step down from the role following a 25 year career with Bunnings. He will be replaced by Damian McGloughlin, who has more than 30 years’ experience in the UK home improvement and DIY market.

The Financial Times reported that Wesfarmers plans to close between 20 and 40 stores, and “has not ruled out quitting the business altogether”.