Kingfisher PLC (LSE:KGF), the parent company of home improvement chains B&Q and Screwfix, faced a challenging trading environment in the last financial year and warned that it expects profits to fall this year.
Shares in the FTSE 100-listed retailer fell 2% in early trading on Monday after annual results showed that revenues and earnings were heavily impacted by stagnant retail spending for the 12 months to 31 January. Like-for-like sales decreased 3.1% year-over-year to just under £13 billion.
Statutory pre-tax profit fell by 22.3% to £475 million (or down by 25% to £568 million on an adjusted basis), though the group was able to keep its yearly dividend stable at 12.4% with a £300 million share buyback programme also announced.
France was especially lacklustre, with potential job cuts on the way under a “new plan to simplify French organisation and significantly improve performance and profitability of Castorama”.
E-commerce sales were a bright spot, with online sales growing 6.4% year on year.
“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," said chief executive Thierry Garnier.
For the year ahead, adjusted pre-tax profit is expected to fall 3-14% to between £490 million and £550 million, with free cash flow projected in the range of £350 million to £410 million.
Kingfisher said to expect repairs, maintenance and renovation on existing homes to provide resilience, but remains “cautious on overall market outlook given lag between housing demand and home improvement demand”.