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LONDON (Alliance News) - Kingfisher PLC Tuesday reported a drop in sales and profit for its last financial year which it blamed on a slower French market and the strength of sterling, but the DUY retailer said the new CEO plans to organise the company "very differently" to work towards "one" Kingfisher.
The DIY retailer, which owns brands including B&Q, Screwfix, Catorama and Brico Dépôt, reported a pretax profit of GBP644 million for the year to end-January, down 15% from GBP759 million a year earlier, as revenue dropped to GBP10.97 billion from GBP11.13 billion. Its closely-watched adjusted pretax profit, which strips out exceptional items and financing fair value re-measurements, dropped to GBP675 million, from GBP730 million.
It said the strength of the pound knocked GBP34 million off earnings abroad once they were translated back to sterling, while it also booked GBP22 million in charges for development activities in new countries that it's entering.
It said total sales would have been up 2.9% if exchange rates had remained constant over the year, with 5.5% growth in the UK and Ireland and 5.0% growth in its international markets offsetting a 1.0% fall in France.
It will pay a total dividend of 10 pence for the full year, up from 9.9p the year before.
New Chief Executive Véronique Laury is planning changes at the company, which Monday pulled out of a deal to expand its French operations by buying Mr Bricolage.
"Home improvement is a great market with huge potential and Kingfisher has a strong position within it with further scope to grow in a sustainable way. However, it is clear to me that we need to organise ourselves very differently to unlock our potential. This will involve taking what is essentially a locally managed set of businesses and creating instead a single, unified company where customer needs come first," Laury said in a statement.
The first step in achieving this is to close around 15% of surplus B&Q space, which comprises around 60 stores and a few loss making stores in Europe, while developing a unified garden and bathroom businesses and the start of a Big Box revitalisation programme across Europe, she said.
"We believe our plans will drive an increase in the value of our business for shareholders, with improved financial metrics through higher sales and lower costs, whilst at the same time optimising the generation and use of cash. Besides the growth in full year dividend, we are also pleased to be announcing today a further GBP200 million capital return during 2015/16 reflecting our confidence in our medium term prospects," Chief Financial Officer Karen Witts said.
"In the short term, whilst we remain encouraged by the improving economic backdrop in the UK, we remain cautious on the outlook for France, our biggest market," Witts added.
Separately, Kingfisher said Kevin O'Byrne, the chief executive of its B&Q UK & Ireland business, will leave in May. The company said it will make an announcement about the handover of his responsibilities in "due course".
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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