By Frank Prenesti
Date: Wednesday 18 Sep 2019
LONDON (ShareCast) - (Sharecast News) - Half year profits at DIY retailer Kingfisher fell on Brexit worries and the move to a low-price strategy at its French Castorama business as the company warned of a "mixed" full-year outlook.
Like-for-like sales fell 1.8% to £5.9bn with growth in Screwfix, Poland and Romania offset by B&Q in the and France as pre-tax profits came in 12.5% lower at £245m as the company continued its turnaround plan under outgoing chief executive Veronique Laury, who will hands over to Carrefour veteran Thierry Garnier on September 25.
Underlying pre-tax profit fell to £353m in the six months to July 31, down from £377m year on year.
The group said the sales performance of B&Q in the UK and Castorama was "disappointing", with a weak consumer backdrop in Britain and disruption caused by new range implementation at B&Q, and transformation-related issues at Castorama France..
"The overall change programme at Castorama France is causing issues in our stock planning, stock management and logistics processes which, in turn, is leading to lower than expected stock availability and fulfilment rates," Kingfisher said on Wednesday.
The company cited "ongoing challenges with vendor management, product data and changes to store operations" as it moved to a new IT system for the problems, adding that moves were underway in the second half to make improvements.
In the UK and Ireland, like-for-like B&Q sales fell 3.2% over the first half, although this was offset by 5.1% growth at its Screwfix unit.
Overall UK and Ireland comparable store sales were 0.7% lower, while retail profit for the division was 1.7% lower at £277m.
The company said it had updated how it imports goods to prepare for possible disruption at ports in a no-deal Brexit, but had enough stock in place and no further significant stockpiling was necessary at this stage.