Kingfisher profits fall as B&Q sales remain under pressure
B&Q owner Kingfisher has seen half-year profits drop 12.5% as sales at the DIY chain remained under pressure amid a swingeing overhaul.
The group reported pre-tax profits of £245 million for the six months to July 31 against £280 million a year earlier.
The group said the UK performance and that of its operations in France were “disappointing” and cautioned the outlook for the rest of the year was mixed across the group.
Its British business was facing “ongoing uncertainty” as Brexit continues to weigh on consumer confidence, while this was compounded by disruption from its ongoing turnaround programme.
In the UK and Ireland, like-for-like B&Q sales dropped 3.2% over the first half, although this was partially offset by growth of 5.1% at its Screwfix arm.
Overall UK and Ireland comparable store sales dropped 0.7%, while retail profit for the division was 1.7% lower at £277 million.
On no-deal Brexit preparations, Kingfisher said it had “updated” how it imports goods to prepare for possible disruption at ports, but it said it already had enough stock in place and no further significant stockpiling was necessary at this stage.
The results mark the last for chief executive Veronique Laury, who hands over the reins to new boss Thierry Garnier on September 25.
Ms Laury said: “Our transformation activity continued in the first half of this year, including new range launches across the group and the rollout of further capabilities within our unified IT platform.
“These activities resulted in some ongoing disruption that impacted sales at B&Q and Castorama France.
“It has been a great privilege to lead Kingfisher during a period of significant change, both in retail and within our business,” she added.
Its results showed like-for-like sales fell 4.4% across its French business, where it operates Brico Depot and Castorama France.
Sales lifted 1.2% across its other international operations, including Poland and Romania.
Kingfisher said for the remainder of the year, it will focus on its ongoing turnaround as well as launching new ranges, such as B&Q kitchens.
But gross profit margins will remain flat for the full year, taking into account costs including up to £35 million in clearance sales for former B&Q kitchens range.
Emma-Lou Montgomery, associate director from Fidelity Personal Investing’s share dealing service, said: “DIY chain B&Q continues to be a spanner in the works at Kingfisher; dragging like-for-like figures down, despite growth coming in from Screwfix.
“Whether Thierry Garnier, who arrives next week to take over from outgoing chief executive Veronique Laury, will finish the job and turnaround the group, which has already spent three and a half years so far failing to make sufficient progress, remains to be seen.”