Kingfisher, which owns DIY retailers B&Q and Screwfix, has reported a 14.8% drop in H1 pre-tax profits, dragged down by “significant weaknesses” with its French operations.
Underlying pre-tax profit dropped to £375m in the six months to 31 July 2018, compared with £440m the previous year, and total sales remained mostly the same with only a £72m increase to £6.08m.
The business is now halfway through its five-year ‘One Kingfisher’ transformation, but the group said a transformation on this scale was “tough”, and there were “challenges that [it was] working [on]”. The company is looking to improve its performance in France and to remove “inefficiencies within the business” as it continues the transformation.
A spokesperson for Kingfisher told Retail Sector that some of these inefficiencies stemmed the price perception of its Castorama business “not being quite right”, which was being viewed as “higher than our main rivals”. “We will be working on this by moving towards an ‘everyday low prices’ position, rather than pushing promotions,” the spokesperson added.
‘Kingfisher One’ is a five year transformation plan that the group announced two and a half years ago and aims to unify the businesses Kingfisher owns, which includes selling the same products across all of its brands in the UK and abroad.
Kingfisher CEO Véronique Laury said: “Our H1 results reflect a solid performance in the UK and Poland whilst France remains difficult. Looking to the full year we remain on track to deliver our strategic milestones for the third year in a row and have put actions in place to support our performance. The outlook for our main markets continues to be mixed.
“We firmly believe in the transformation plan benefits and maintain our ambition. The environment is making our task more difficult than expected and we will always take the right decisions for the company in the long-term.”