B&Q owner Kingfisher has reported a 6.4% fall in underlying first half profit, mainly hurt by the weak performance of its French operation, underlining the task ahead for its new chief executive.
Kingfisher — which also owns the Screwfix brand — is in the fourth year of a five-year programme that was designed to boost earnings. However, profits went backwards in 2018-19, and the group said in March it would part company with Véronique Laury, its CEO since 2014.
She exits next week and will be succeeded by Carrefour veteran Thierry Garnier.
Kingfisher’s shares have fallen 24% over the last year and some analysts believe the firm is vulnerable to a possible bid from private equity.
The group, which also owns the Castorama and Brico Depot brands in France and elsewhere in mainland Europe, said it made an underlying pre-tax profit of £353m (€398m) in the six months to the end of July.
While that was ahead of analysts’ average forecast of £342m, it was down from £377m made in the same period last year.
Total sales fell 0.9% on a constant currency basis to £6bn. Like-for-like sales were down 1.8%, with growth in Screwfix, Poland and Romania offset by B&Q and France.
Kingfisher said its outlook by geography remained mixed, highlighting continued uncertainty around UK consumer demand.
It maintained its forecast for a flat gross margin for the full 2019-20 year.
Prior to Kingfisher’s update analysts were, on average, forecasting a 2019-20 underlying pre-tax profit of £658m, down from £693m made in 2018-19.
Kingfisher also said that its new chief executive will have a free rein to pursue whatever strategy he wants, including a possible break-up of the group.
“There’s no handcuffs on Thierry’s arrival into the company, he’ll take his own independent view of all moving parts of the business,” Kingfisher chairman Andy Cosslett told reporters when asked about a possible break-up. But he added: “We actually believe, though, that the current composition of the group gives us the scale we need.”