Kingfisher (LON:KGF), the parent company of B&Q and Screwfix, has reported a significant decline in annual profits, plummeting by more than a quarter.
The company issued a cautionary note, projecting another steep fall in earnings for the current year as it embarks on an overhaul of its French operations in a bid to rejuvenate its fortunes.
Following the announcement, Kingfisher’s shares experienced a 2% decline in opening exchanges.
Kingfisher results
Underlying pre-tax profits for the year ending January 31 plunged 25.1% to £568 million.
Like-for-like sales in France saw a decline of 5.9%, while elsewhere across Europe, the fall was 7.7%.
However, the UK and Ireland markets demonstrated relative resilience, with sales up by 0.8%, mitigating the overall group-wide sales decline to 3.1%.
Profits to fall in 2024-25
Although Kingfisher has managed to mitigate sales declines in the new financial year, reporting a 2.3% fall so far, it remains cautious about its profit prospects.
The company anticipates profits to further decrease in 2024-25, ranging between £490 million and £550 million, a stark contrast to the £560 million initially anticipated by analysts.
Thierry Garnier, the CEO of Kingfisher, emphasized the company’s cautious stance on the overall market outlook for 2024.
While short-term demand for repairs, maintenance, and renovation in the UK housing sector remains robust, uncertainties loom amid a lackluster housing market, particularly impacting major projects such as bathroom and kitchen refits.
Kingfisher’s European challenges
Kingfisher’s struggles extend beyond the UK, with its operations in France facing significant headwinds.
The company’s efforts to overhaul its French arm underscore the challenges it faces in the broader European market.