Kingfisher warns over ‘uncertain’ trading as profits take a tumble

B&Q owner Kingfisher has reported annual profits tumbling more than 10 per cent and warned of an “uncertain” UK outlook after a recent hit to sales.

The group said B&Q like-forlike sales slumped 5.1% in the final three months of its year, while its better-performing Screwfix arm saw sales growth slow to 7.1% amid falling demand for so-called “big ticket” ranges such as kitchens.

Kingfisher posted a 10.1% fall in annual pre-tax profits to £682 million, but saw underlying profits edge 1.3% higher to £797m. Shares fell about 6% after the results.

It said overall UK and Ireland like-for-like sales rose 0.6% in the year to January 31 as Screwfix continued to offset sales woes at B&Q, with price inflation also providing a boost.

B&Q like-for-like sales dropped 2.8%, while tradefocused arm Screwfix enjoyed a 10.1% increase over the year.

But Kingfisher said “business disruption” knocked around 1.5% off its group-wide like-forlike sales as it was left with stock availability problems amid efforts to clear out old stock.

Chief executive Veronique Laury said: “Our performance this year has been mixed. However, with 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 acting on the causes of this disruption, however; next year will be another big year in our transformation plan.”

She added: “The outlook for our main markets is also mixed. The UK is more uncertain.”

B&Q is in the middle of an overhaul, which has seen it shut 65 shops and slash about 3,000 jobs in the UK and Ireland over the past two years.

Kingfisher’s annual results showed that, outside the UK, its French chains Castorama and Brico Depot saw like-for-like sales slump 3.5% as the stock availability issues compounded trading woes, despite a pick-up in the wider French DIY market.

Its operations in Poland offered a bright spot, with likefor-like sales surging 6.3%.

Ms Laury insisted her turnaround was beginning to bear fruit and said it was set to deliver a £500m boost to annual profits by the end of 2020/21.

However, the group will keep expansion on hold while the overhaul continues – except for its Screwfix chain, which saw 60 net new stores added in 2017, taking the total to 577.

Kingfisher eventually wants to have 700 Screwfix outlets across the UK and Ireland.