LONDON (Alliance News) - Kingfisher PLC on Wednesday posted a sharp fall in annual profit amid a tough year for France's Castorama, though the results broadly managed to beat analyst expectations.
Furthermore, the DIY retailer announced the launch of a plan to replace Chief Executive Officer Veronique Laury, as part of what the company called "the board's regular talent and succession planning process".
Laury, who three years ago launched the restructuring plan, ONE Kingfisher, aimed at restoring the firm's profitability, will hold her position until a replacement is found.
"I have enjoyed leading the ONE Kingfisher team through the transformation to become the leading home improvement company," Laury said. "Leading the transformation has been so exciting but also very challenging. As the transformation approaches its final year, I believe it is right for someone else to lead the next phase of the ONE Kingfisher journey."
For the year ended January 31, Kingfisher posted a pretax profit of GBP322 million, less than half the prior year's GBP682 million, mostly due to property-related exceptional items.
Sales amounted to GBP11.69 billion, up just 0.3% from GBP11.66 billion a year ago.
Underlying pretax profit, before transformation costs, fell 13% to GBP693 million from GBP797 million, broadly in line with analyst consensus which had expected a 14% drop to GBP685 million.
Adjusted pretax profit slumped 16% to GBP573 million from GBP683 million. This did, however, beat analyst forecasts of a 19% fall to GBP550 million.
Finally, retail profit reduced 11% to GBP753 million from GBP849 million, though this was marginally above analyst expectations of GBP744 million.
The home improvement retailer's like-for-like sales fell 1.6% in the year as growth in Screwfix in the UK and the company's performance in Poland was offset by a challenging year for France's Castorama.
In the UK and Ireland, the retailer's core market, like-for-like sales dipped 0.8% to GBP5.06 billion. B&Q UK & Ireland like-for-like sales slipped 3.0%, steeper than last year's 2.8% decline and worse than the 2.6% forecast by analysts.
While Screwfix like-for-like sales rose 4.1%, this marked a significant slowdown from a 10% increase the year before.
In the rest of the firm's markets, France's like-for-like sales were down 3.7% and those in Poland up 1.7%, broadly in line with consensus.
France's performance weighed down by a 7.1% like-for-like sales drop at Castorama. Looking ahead, Kingfisher set the brand's return to profitability as one of its main priorities.
Brico Depot like-for-like sales in France, meanwhile, rose 0.4%.
"During the year, the UK, Poland and Brico Depot France performed well, leveraging the benefits of our transformation. However, Castorama France has been disappointing and we are implementing a clear plan to sustainably improve its performance," CEO Laury said.
Kingfisher held its final dividend at 10.8 pence per share.
Looking ahead, as it enters the fourth year of its five-year transformation plan, the retailer said that the building of its 'engine' is nearing completion.
Kingfisher expects gross margins in the year ahead flat on this year's 36.9% after clearance costs.
The company said it remains convinced in its "ability to deliver significant further financial benefits from transformation". Furthermore, Kingfisher said it is considering the closure of 15 "poor performing stores across the business" over next 2 years as well as closing 19 Screwfix Germany outlets.
Kingfisher (KGF)