B&Q owner Kingfisher saw its profit plunge last year due to worse-than-expected trading at its French arm, Castorama
For the full year, the DIY chain said adjusted profit before tax was £568m, in line with lowered expectations, but down 25 per cent compared to the £758m it made the year before.
The retailer, fronted by Thierry Garnier, issued two profit warnings during the year as consumer spending declined and while sales in France and Poland were impacted by a “more challenging consumer backdrop.”
Sales for the year in the country fell by 5.9 per cent, while they grew slightly by 0.8 per cent in UK and Ireland.
Today, the board said it is initiating a “new plan” to simplify the French organisation and “significantly improve the performance and profitability of Castorama.”
Meanwhile, in the UK, Kingfisher said it has 40 new stores planned for the year.
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.
“I am immensely proud of all our teams for their efforts. In the UK & Ireland, B&Q, TradePoint and Screwfix each delivered resilient sales and market share growth – in particular very strong gains at Screwfix.”
He added: “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 e-commerce marketplace and trade customer initiatives similar to those successfully implemented in the UK.”
It sounded a note of caution on the overall outlook too, saying: “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.”
The business said it would make £490-£550m in operating profit in the current fiscal period.
Kingfisher also said it would aim to expand its footprint over the coming years. The group laid out plans to commission 40 new Screwfix stores in the UK and Ireland in the coming year, with 15 new stores in France. It also said Castorama Poland would aim to open 75 medium-box and compact stores over the next five years.
Shares in Kingfisher, which also owns the Screwfix brand in the UK, have fallen by a fifth over the past year and have slumped by 37 per cent since their post-pandemic high printed in July 2021.