Kingfisher: French trading dampens performance of B&Q owner
Kingfisher, the parent company of B&Q and Screwfix, has reported a drop in sales driven by the weak consumer market in France.
Sales fell 1.5 per cent to £12.78bn in the year ended January 31, Kingfisher told markets this morning.
This drop was overwhelmingly driven by a 6.2 per cent drop in sales in France, with the UK and Poland both steady.
Operating profit at the B&Q owner fell 29.7 per cent to £407m, while pre-tax profit fell 35.4 per cent to £307m.
Basic earnings per share almost halved, from 18.2p to 10.1p, and the company’s total dividend was unchanged at 12.4p.
Kingfisher said it had made cost savings of £120m during the year, but faces year on year cost inflation of £90m due to the combined impact of higher wages, higher employers national insurance contributions and their French equivalent, and the UK government’s packaging fees regulations (the Extended Producer Responsibility scheme).
Despite the “headwind” in consumer spending and wage costs, chief executive Thierry Garnier said the company was “in its best operational shape for years”.
“For the first time in over six years, we grew our market share in all key regions.
“We delivered profit and free cash flow in line with or ahead of our initial guidance, with strong delivery against our strategic objectives,” Garnier said.
‘Big-ticket’ categories finally delivered sales growth in the fourth quarter in the UK and Poland, Kingfisher added, after years of Brits shying after from home renovations. Wickes reported a similar fourth-quarter trend in its annual results.
“Looking to the year ahead, the recent government budgets in the UK and France have raised costs for retailers and impacted consumer sentiment in the near term.
“With this in mind, we remain focused on what is in our control – progressing our strategic objectives at pace to deliver further market share gains, and continuing to manage gross margin, costs and cash effectively,” Garnier said.