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Group sales up, profits down at Kingfisher

Published: 27 March 2008
Cheshire announces management changes as consumer uncertainties hit full-year profits.
Group sales up, profits down at Kingfisher
Ian Cheshire, the recently appointed chief executive of Kingfisher has said he plans to centralize management and cut costs to 'deliver the group's full potential'.

Kingfisher made an adjusted pre-tax profit of £386 million in the year to February 2, 2008 down from £396.6 million the year before, on retail sales up 7.9% at £9.4 billion (+2.6% on a like-for-like basis).

In a new structure for the group's businesses, three new management roles have been created.

One in France with Philippe Tible, chief executive of Castorama France; a second in the UK, although no appointment has been made in the UK; and a third to head 'other international'.

The structure will also see a group-wide approach to buying, own-brand development and IT infrastructure.

As expected the company cut its final dividend by 50% to 3.4 pence with a similar reduction expected for the forthcoming interim dividend.

Kingfisher also announced that it has set itself a target of flat net debt for the current year with existing capital deployed reviewed and new capital investment continuing at a slower rate.

"Annual capital investment will be around £400 million, reprioritised to the highest and fastest-returning projects," Kingfisher said in its statement.

Stores

Operationally, UK, sales grew 5%, while Kingfisher explained that underlying retail profit was flat before the impact of significant range reviews and store renewals.

B&Q's total reported sales were £3.9 billion, up 2.7% (52 weeks); like-for-likes were up 0.6%.

Internationally, Kingfisher's businesses, which represent more than half of its sales, delivered strong sales, up 11%, and retail profit up 5%.

Good performances were in France (sales up 7.2%, retail profit up 13.2%); and Poland (sales up 31.1%, retail profit up 41.8%) while B&Q China is undergoing restructuring that will cost £22m in 2007/08, with a further charge of around £11m in 2008/09.

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