Kingfisher sees drop in full year profit
Kingfisher, the owner of B&Q and Screwfix, has reported a 13% fall in underlying pre-tax profit to £693 million after retail profit increases in the UK and Poland were offset by weaker performances in France, Russia and Romania.
While total sales edged up 0.3% in constant currency to £11.685 billion in the year to 31 January, like-for-like sales were down 1.6% overall.
In the UK and Ireland B&Q total sales declined by 2.8% as like-for-like sales fell by 3%. In contrast sales at Screwfix climbed by 10.3% and by 4.1% on a like-for-like basis as the retailer benefited from strong digital growth and the continued rollout of new outlets. The performance of both businesses meant that retail profit was up 6% to £399 million in the UK and Ireland.
Meanwhile, Kingfisher France sales declined by 3.4% with like-for-likes down 3.7% after improved sales at Brico Dépôt were offset by a weak performance in Castorama. This meant that retail profit in France dropped by 35.2% to £209 million.
Commenting on the performance, Véronique Laury, chief executive of Kingfisher, said: "We have achieved radical organisational and behavioural change across Kingfisher over the last three years. We've done this against the backdrop of rapid structural change in retail alongside high levels of macroeconomic uncertainty, which are ongoing. Navigating these conditions while maintaining focus on a transformation of this scale has required huge commitment from our people.
"During the year, the UK, Poland and Brico Dépôt France performed well, leveraging the benefits of our transformation. However, Castorama France has been disappointing and we are implementing a clear plan to sustainably improve its performance. Screwfix's leading omnichannel proposition has consistently delivered strong growth in recent years and we have identified additional expansion opportunities in both the UK and in new markets, initially in the Republic of Ireland.”
Sales in other international territories increased by 5.7%, or by 1% on a like-for like basis, reflecting growth in Poland and the acquisition of Praktiker Romania in November 2017. However, retail profit decreased by 4.3% to £145 million after the Polish growth was offset by losses in Russia, Romania and Screwfix Germany.
Laury added: "Our 'engine' is now largely built and we are confident in delivering significant financial benefits over time. We are targeting growth in sales, margin and returns over the medium term."
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