Kingfisher has begun to lay the plans for its next chief executive appointment against a backdrop of falling profits.
The business has commenced succession planning as part of its move to replace Véronique Laury. She is three years into her five-year transformation plan of the business, which has so far failed to bear fruit. Her departure date has not yet been set.
Pre-tax profits plummeted 52.8% to £322m despite sales inching up as Laury’s One Kingfisher plan once again did not deliver. Underlying pre-tax profit reduced 13% to £693m.
Sales for the year to January 31 inched up 0.3% and 1.6% in constant currency like-for-likes. Gross margin was maintained.
In the UK, sales rose 1.1% but were down 0.8% on a like-for-like basis. B&Q’s total sales were down 2.8% to £3.39bn and like-for-likes dropped 3%.
Online sales grew 9%, with mobile and click-and-collect driving growth, and now represent 5% of total sales.
Screwfix’s total sales rose 10.3%, 4.1% on a like-for-like basis, to £1.67m. Growth was spearheaded by specialist trade desks for plumbers and electricians, strong digital growth and the continued roll-out of new outlets with 50 new stores opened during the year.
The One Kingfisher plan, which began under Laury in 2016/17, is designed to leverage the scale of the Kingfisher business. It is underpinned by three strategic pillars: a unified offer, strengthening its digital capabilities and optimising efficiencies across Europe.
It was designed to save the business £500m annually by the end of 2020/21 and was expected to cost £800m.
Kingfisher today insisted that the scheme was “delivering” and that the benefits gained were in line with its initial plan.
It conceded that benefits had “been outweighed by weakness in our base business due to a combination of ‘internal’ factors and ‘external’ challenges”, but said much of the heavy lifting was complete and that it was well-positioned to benefit from future sales growth.
Chairman Andy Cosslett said: “Vero [Laury] has been a powerful leader of the business and the driving force behind our plan to turn Kingfisher into a more unified and innovative business. This year will mark a transition in our transformation journey having now reached a critical mass.
“We are starting to see clear evidence emerging that we can create a powerful and differentiated home improvement experience for our customers which will convert to profitable growth going forward.
“Vero has brought great vision to the business and I would like to take this opportunity to thank her for all of her hard work and passion, and for her ongoing commitment to transforming Kingfisher into a business with a stronger foundation for sustainable growth.”
Laury added: “Leading the transformation has been so exciting but also very challenging. As the transformation approaches its final year, I believe it is right for someone else to lead the next phase of the One Kingfisher journey. I will continue to give 100 per cent until the day I depart.”
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