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Kingfisher announces profit rise but sales decline at B&Q

Published: 22 March 2017 - Jenny Wonnacott

B&Q parent group Kingfisher has announced a significant rise in its underlying and adjusted pre-tax profits, up 14.7% and 8.3% respectively, for the year to January 31, 2017.

 “It has been a productive and important year for Kingfisher” - Veronique Laury, CEO
“It has been a productive and important year for Kingfisher” - Veronique Laury, CEO

Adjusted sales were up 8.7% across the group, bringing the total to £11,225m. Retail profit grew by 13.5% and the underlying basis EPS was up 17.7%. Total adjusted sales in the UK and Ireland were up by 2.4%.

Statutory pre-tax profits stood at £759m for the year, up 48.2% on the previous year, and post-tax profit stood at £610m, a large rise copmared with the previous year's £412m.

B&Q's sales declined, however, by 3.3% to £3,680m due to store closures. Like-for-likes increased by 3.5%, of which 2.6% was a result from sales transference from the closed stores.

Screwfix sales were up by 23.2%, a LfL increase of 13.8%, bringing the total to £1,299m. This was driven by strong digital growth as well as growth from the specialist trade desks for electricians and plumbers. Screwfix opened 60 new outlets during the year, bringing its total to 517.

The group's 14.7% growth in underlying pre-tax profit was driven by like-for-like sales increases in the UK and Poland, as well as £30m Goods Not for Resale benefits being delivered earlier than planned. The group reported that it had “delivered key Year 1 One Kingfisher strategic milestones” and was well-placed for years two and three.

The group is now expecting to deliver a £500m sustainable EBIT uplift by the end of the 2020/21 financial year “over and above business as usual.” It is also projecting a capital return of £600m by the end of the 2018/19 financial year.

Chief executive officer Veronique Laury said: “It has been a very productive and important year, a year which has again delivered sales and profit growth. I am really pleased that our performance has been achieved alongside delivering the key first year strategic milestones of our ambitious five year transformation plan, based on creating a unified company where customer needs come first. We have learned a lot and are aware of the challenges. We are well set up for next year and beyond as the level of activity increases.

“Looking forward, the EU referendum has created uncertainty for the UK economic outlook and we remain cautious on the outlook for France, especially in light of the forthcoming presidential elections. Looking longer term, supported by the expertise and energy of our colleagues, we remain confident in the size of the prize and our ability to deliver the plan - both the financial benefits the transformation will unlock and the stronger business it will create.”

The results came at the same time it was announced chairman Daniel Bernard would retire and step down from the board from June 2017. He will be replaced by Andy Cosslett, who will be appointed to the board as a non-executive director and chairman-designate on April 1, formally taking over at the June AGM.

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