Cheshire outlines Kingfisher vision as sales climb

Cheshire, who was appointed to the top job in January, wants to drive a “step change” in value for shareholders and will implement a new management structure, including three new geographical divisions: the UK, France, and Other International.

He also set a target of constant currency flat net debt for the current year as Kingfisher announced that it will half its dividend to 3.4p, with a similar reduction expected in the interim dividend.

Kingfisher’s group retail sales for the year to February 2 were up 8 per cent to£9.36 billion – a 2.6 per cent like-for-like increase. Adjusted pre-tax profit was down 2.8 per cent to£386 million.

In the UK, sales at Kingfisher’s B&Q, Screwfix and Trade Depot brands climbed 5 per cent to£4.4 billion – a 0.4 per cent like-for-like increase. Retail profit fell 16.3 per cent to£153 million.

B&Q’s total sales were up 2.7 per cent to£3.9 billion. For the first time in three years, like-for-likes climbed 0.6 per cent, despite the challenging market. Retail profit was£131 million against£163 million the previous year after investment in store revamps and range review clearance.

Kingfisher’s international sales were up 11 per cent and retail profit growth rose 5 per cent. In its Polish division, sales jumped 31.1 per cent, with a retail profit hike of 41.8 per cent.

The Chinese B&Q division is to be restructured leading to an exceptional charge of£22 million in the present year and another charge of£11 million expected for the following year.

Cheshire said: “We have a great opportunity to unlock the full potential of our strong assets. By changing how the group as a whole is managed, tightening our use of capital and driving out higher cash returns from our business we intend to deliver step change in value for our shareholders.”

He said the group would prioritise improving cash margin and controlling costs during the tough trading climate.