British DIY chain Kingfisher’s net profit dropped more than 20 % in the past fiscal year because of a restructuring plan in its native land and weak French sales.
Slight turnover growth
The good news is that Kingfisher’s turnover grew 3.8 % in its broken fiscal year, to 11.66 billion pounds (some 12.5 billion euro). Screwfix, which targets professionals and its Polish division performed well (+ 5.3 %), but French sales slumped 3.5 % with Brico Depot performing slightly worse than Castorama. B&Q’s performance in the United Kingdom also dropped 2.8 % because consumers faced plenty of empty shelves as a result of the transformation.
Operational profit also dropped, from 773 to 685 million pounds, but net profit actually sank like a rock, down 20.5 % to 485 million pounds (550 million euro). This is all because of Kingfisher’s five-year plan, which launched two years ago and which has to lower costs. The goal is to maximize the group’s efficiency when it comes to product range, purchases and IT systems.
“You cannot perform a major transformation without breaking a few eggs”, Véronique Laury, who became the company’s CEO two years ago, said. She does claim the first effects are already taking shape. The board has mixed feelings about the current fiscal year though: the Brexit is causing turmoil in the United Kingdom and the French DIY will once again show slight growth, leading to a “volatile but encouraging” French market.