B&Q owner Kingfisher has warned on profits for the third time in six months as it posted a 25% drop in full-year profits following weak performances across its French and Polish arm.
Adjusted pre-tax profits for the DIY group plunged to £568m in the year to 31 January, down from £758m, weighed down by lower retail profit and higher central costs. On a statutory basis, profits fell 22% to £475m.
The group said it remained cautious on the overall market outlook because of the time lag between improving housing demand and home improvement demand.
As a result, Kingfisher is forecasting an adjusted pre-tax profit for the current year will fall to between £490m to £550m, below analysts’ average forecast of £560m.
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The B&Q and Screwfix owner reported group sales had dipped 1.8% to £12.9bn, with a 3% increase in UK and Ireland helping to partially offset a near 5% drop of sales in France “where trading was impacted by low consumer confidence”.
The group said the board is initiating a “new plan” to simplify the French organisation and “significantly improve the performance and profitability of Castorama”.
Meanwhile, in the UK, it is continuing its expansion across the country with 40 new Screwfix stores planned for the year.
Kingfisher chief executive Thierry Garnier said: “Despite all the macroeconomic and consumer challenges in our markets over the past year, we have stayed focused on our customers and our long-term strategy.”
“In France, where the market has been impacted by low consumer confidence, we have made significant adjustments to the cost base and started to embed ecommerce marketplace and trade customer initiatives similar to those successfully implemented in the UK.
“In the short term, while repairs, maintenance and renovation activity on existing homes continue to support resilient demand, we are cautious on the overall market outlook for 2024 due to the lag between housing demand and home improvement demand.
“Against this backdrop we will remain agile and focused on what is within our control – leveraging our strategy to deliver market share growth, driving productivity gains, and managing our costs and cash effectively.
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