B&Q owner Kingfisher sees profits fall after costs hit
B&Q owner Kingfisher has warned over a cautious backdrop in the UK and France as profits took a hit from efforts to overhaul the business.
The group said adjusted pre-tax profits fell 5.7 per cent to £394 million in the six months to the end of July, as it faced £46 million in costs linked to its transformation plans.
Kingfisher, which also owns DIY chain Screwfix, said it had to grapple with "business disruption" as the roll-out of a new IT system put some operations under strain.
Group sales lifted 4.5 per cent to more than £6 billion, but sales across the UK and Ireland dropped 0.4 per cent to £2.6 billion in response to B&Q store closures and transformation pressures.
Total UK sales at B&Q were down 6.3 per cent to £1.9 billion over the period, with like-for-like sales falling 2.3 per cent.
However, Screwfix helped offset the pressure with another strong performance, as half-year sales leapt 18.7 per cent to £727 million after it launched 16 new stores, bringing its total to 533.
UK retail profit pushed marginally higher, up 1.7 per cent to £215 million for the half-year.
Chief executive Veronique Laury said: "Looking across our markets, we have seen solid growth at Screwfix and Poland, offset by continued weaker sales in France and some business disruption, principally reflecting product availability and clearance.
"We are aware of and are acting on the causes of this disruption, which we are confident will ease.
"For the full year, we have self-help plans in place to support our overall performance and remain comfortable with full-year profit expectations, though we remain cautious on the second half backdrop in the UK and France."
Sales in France dropped 4.1 per cent to £2.3 billion, with like-for-like sales also down by 4.6 per cent, as it struggled with a sluggish performance compared to the wider market.
The firm's five-year transformation plan hopes to deliver a £500 million profit boost by the end of 2020/21.