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Kingfisher 2014 profit declines, will close some stores

Staff writer |
Kingfisher Plc reported a profit for fiscal 2014 that declined from last year, reflecting a slower market in France since summer 2014, and adverse foreign exchange movements.

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The company also said it plans to close around 15 percent surplus B&Q space and a few loss making stores in Europe.

The company said it remains encouraged by the improving economic backdrop in the UK, while remaining cautious on the outlook for France, its biggest market.

"Home improvement is a great market with huge potential and Kingfisher has a strong position within it with further scope to grow in a sustainable way. However, it is clear to me that we need to organize ourselves very differently to unlock our potential," chief executive Véronique Laury said.

Announcing its preliminary results for the fiscal year ended January 31, 2015, the company said its pre-tax profit decreased 15.2 percent to 644 million pounds from 759 million pounds in the prior year. The Group has booked exceptional income of 71 million pounds.

Excluding exceptional items, profit before tax was 679 million pounds, compared to 742 million pounds a year earlier.

On a per share basis, earnings decreased to 24.2 pence from 29.7 pence in the preceding year. Adjusted earnings per share for the current fiscal were 20.8 pence, while the company posted 22.6 pence last year. Kingfisher had restated its prior-year results.

Profit attributable to equity shareholders of the company for the year declined to 573 million pounds from 709 million pounds. Earnings per share dropped to 24.2 pence from last year's 29.7 pence. Prior-year results were restated.

Sales for the full year declined 1.4 percent to 10.97 billion pounds from 11.13 billion pounds in the prior fiscal. However, sales grew 2.9 percent at constant currency.

In France, sales decreased 6.6 percent to 4.13 billion pounds, and retail profit declined 11.8 percent to 349 million pounds from last year. In UK & Ireland, sales improved 5.4 percent to 4.60 billion pounds, and retail profit increased 16.2 percent to 276 million pounds.

Other international sales decreased 4.5 percent to 2.23 billion pounds, and retail profit declined 26.1 percent to 108 million pounds.

Retail profit for the year declined 5.9 percent to 733 million pounds.

In December, Kingfisher had agreed to sell a controlling 70 percent stake in its B&Q China business to Wumei Holdings Inc for a total cash consideration of 140 million pounds. The deal is expected to close during the first half of 2015/16.

The board has also proposed a final dividend of 6.85 pence, up 1 percent from last year, payable on June 15 to shareholders on record as of May 15, 2015. This will result in a full-year dividend of 10.0 pence.

"Besides the growth in full year dividend, we are also pleased to be announcing today a further £200 million capital return during FY 2015/16 reflecting our confidence in our medium term prospects.

"In the short term, whilst we remain encouraged by the improving economic backdrop in the UK, we remain cautious on the outlook for France, our biggest market," CFO Karen Witts stated.

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