Kingfisher on track despite ‘business disruption’
Kingfisher, the owner of B&Q and Screwfix, has seen its first half underlying pre-tax profit rise by 0.9% to £440 million as the business continues to work its way through its five-year transformation plan.
In the six months to 31 July, statutory pre-tax profit declined by 5.9% to £402 million.
Kingfisher UK & Ireland sales were down 0.4% to £2.602 billion but up 1.1% on a like-for-like basis.
B&Q total sales dropped by 6.3% to £1.875 billion while like-for-like sales declined by 2.3%. Screwfix grew its total sales by 18.7% to £727 million with a like-for-like increase of 11.7%. This was driven by strong growth from specialist trade desks.
Sales at Kingfisher France, which includes the Castorama and Brico Dépôt brands, declined by 4.6% on a like-for-like basis while sales in Russia fell by 9.1%.
The company fared better in Poland where like-for-like sales were up 3.8%.
Kingfisher said the six month period had seen a “significant” increase in the level of transformation activity with changes in its stores and new product ranges. It is also changing its ways of working and rolling out a unified IT platform.
The five-year plan, which commenced 18 months ago, aims to create a unified home improvement offer, drive digital capability and optimise operational efficiency. Kingfisher expects the plan to deliver a £500 million sustainable annual profit uplift by the end of 2021.
Véronique Laury, Kingfisher chief executive, said: “As planned, this first half has seen a significant increase in the level of transformation activity. The pace is quick and impactful and is reflected in our performance. We continue to have a flexible approach as our transformation progresses, adapting as necessary, and this will support the significant amount of change planned for the second half and beyond.
“Looking across our markets, we have seen solid growth at Screwfix and Poland, offset by continued weaker sales in France and some business disruption, principally reflecting product availability and clearance. We are aware of and are acting on the causes of this disruption, which we are confident will ease.
“For the full year, we have self-help plans in place to support our overall performance and remain comfortable with full year profit expectations, though we remain cautious on the second half backdrop in the UK and France.”
Looking ahead, Laury said the business is on track to deliver its full year strategic milestones for the second year in a row.
She added: “We remain confident in our ability to deliver our five year plan and in the benefits it will generate, supported by our great team of hard-working and enthusiastic colleagues.”
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