Alongside mixed annual results, the owner of the B&Q, Screwfix and Castorama chains warned that its profits in the year ahead will fall short of analysts’ expectations, adding to pressure for the DIY group to accelerate its turnaround plan.
Kingfisher’s Chief Executive Thierry Garnier noted that while repairs, maintenance and renovation activity on existing homes continue to support demand, the business was cautious on the overall market outlook for 2024 due to “the lag between housing demand and home improvement demand”.
The gloomy outlook came after the group reported that its adjusted pre-tax profits dropped 25.1% to £568m over the 12 months to 31 January 2024. For its new financial year, Kingfisher is forecasting that pre-tax profits will be between £490m and £550m, below the £560m that analysts had predicted.
The group’s sales fell by 1.8% on constant currency terms to £12.9bn last year, with like-for-likes down 3.1% after weak trading in its overseas units.
Performance in its UK and Ireland division was relatively robust, with like-for-like sales increasing 0.8%, supported by resilient e-commerce and trade customer sales. The group noted that B&Q, TradePoint and Screwfix all made market share gains.
However, sales in France (-5.9%) and Poland (-9.5%) were impacted by a more challenging consumer backdrop. Kingfisher revealed that it planned to simplify its business in France, including restructuring and modernising the Castorama store network.
In the first quarter of its new financial year, the group said like-for-like sales were down 2.3%. Trading in the UK & Ireland was ahead of the sales trend in the final quarter of last year, with positive core and seasonal category sales offset by weakness in ‘big-ticket’ sales. In France, Kingfisher noted that the overall sales performance had started to improve.
The company revealed that it was looking to open up to 40 new Screwfix stores this year in the UK and Ireland and up to 15 shops for the brand in France. It is also launching new online marketplaces in France and Poland following strong results at B&Q.
Garnier said: “Looking forward, we remain confident in the attractive growth prospects of the home improvement industry and our ability to grow ahead of our markets.”
The company boomed during the pandemic lockdowns as consumers renovated their homes. However, it has struggled since as rising interest rates cooled the housing market.
