​Kingfisher profits decline as B&Q sales drop

The DIY giant said it was impacted by difficult market conditions in the UK and France in the 12 months to January 31, which contributed to an 8.1% fall in adjusted pre-tax profits to £683m.

On an underlying basis – not including costs relating to its transformation project – pre-tax profits crept up 1.3% to £797m. 

The B&Q, Screwfix and Castorama-owner’s like-for-like sales slipped 0.7% year on year, while total sales fell 0.3% to £11.65bn in constant currencies. 

Kingfisher chief executive Véronique Laury said the business has made “good progress” in the second year of its five-year transformation, but cautioned that performance during the year has been “mixed” owing to some stock availability issues as it introduced new unified ranges. 

The DIY boss added that the outlook for Kingfisher’s main markets is also mixed: “The UK is more uncertain, France is encouraging yet volatile, whilst the market in Poland remains supportive.”

UK

In the UK and Ireland, growth at Screwfix offset a weaker performance at B&Q, where sales declined 5.3% to £3.49bn and like-for-likes fell 2.8%.

B&Q has made one-hour click-and-collect available on 29,000 products and said digital sales jumped 11%, now representing 4% of its total sales.

Meanwhile, stablemate Screwfix enjoyed a 16.7% sales increase, up 10% on a like-for-like basis, to £1.5bn.

The retailer said this was driven by strong growth from the specialist trade desks exclusive to plumbers and electricians, solid digital growth and the continued roll-out of new outlets, taking its total to 577.

Across the UK and Ireland, total retail profit rose 5% to £375m, while like-for-likes edged up 0.6%.

The retailer said it has experienced softer sales patterns at both UK businesses in its fourth quarter, reflecting “weaker demand for big-ticket items” such as kitchens.

One Kingfisher 

Laury also gave an update on the company’s One Kingfisher transformation plan. 

She said: “For the second year in a row, all our key strategic milestones have been met and I am really pleased to say that we are starting to see tangible delivery of our plan.

“The changes are now visible across our stores and online. Over a third of our ranges have now been unified and they are being well received by customers. We are buying as one and are starting to see the customer and financial benefits coming through, both in sales and gross margins.

“Our digital initiatives are gaining momentum as we enter the final year of roll-out of our unified IT platform. I am also pleased to see that our operational efficiency initiatives, focusing initially on goods not for resale, continue to deliver and are now gathering pace as we start to unlock further opportunities.”

She added that the business is acting on the causes of its transformation-related disruption, principally reflecting product availability and clearance, but warned that there could be more upheaval to follow.

“Next year will be another big year in our transformation plan. The pace of change is quick and impactful but necessary as we build the new One Kingfisher engine to support our ambition to be the leading home improvement company, based on putting customer needs first.”