Kingfisher unveils new strategy as full-year profits fall

The DIY group posted a 5.2% fall in adjusted pre-tax profit to £544m in the year to January 31, while group sales declined 0.8% to £11.5bn, down 1.5% on a constant currency basis.

The retail group said that its first quarter like-for-like sales slumped 24.8% due to coronavirus-induced disruption across its store estate. But in the second quarter group like-for-likes jumped 21.8% year-on-year, driven by strong ecommerce sales. 

During the retailer’s financial year, B&Q’s sales declined 3.1% to £3.3bn, down 2.9% on a like-for-like basis. By contrast stablemate Screwfix’s sales rose 9.4% to £1.8bn, up 5% in like-for-like terms.

Against this backdrop new chief executive Thierry Garnier unveiled his strategic plan for business.

Called Powered by Kingfisher, the plan consists of eight strategic pillars including immediate priorities to ‘focus and fix’ challenges such as store operations in France and improved click and collect capabilities alongside more long term aims such as building ‘a mobile-first, service orientated customer experience’, testing new store concepts and increasing its own-brand offering.

Kingfisher has donated £2.5m worth of PPE to front line medical workers to date in the ongoing fight against coronavirus and has stressed that, despite business disruption triggered by the pandemic the business has “significant liquidity headroom”, including £2bn worth of cash in the bank.

Garnier said: “Throughout the COVID-19 crisis, our priorities have been clear - to provide support to the communities in which we operate, to look after our colleagues as a responsible employer, to serve our customers as a retailer of essential goods, and to protect our business for the long term.

“While the coronavirus crisis has obviously shifted our immediate priorities, we have continued to plan for the longer term and implement our new strategic plan. It would be a mistake not to. Kingfisher is well positioned within a home improvement market that is resilient and has attractive long term growth prospects. We have strong market positions and distinctly positioned retail banners that address diverse customer needs. These are major strengths in a world that is so volatile and uncertain.

“Our clear intent is to become a more digital and service orientated company, using our strong store assets as a platform. We will continue to develop our own exclusive brands as a differentiator, cater for diverse local customer needs, and each retail banner will have its own positioning and plan. We will ‘power’ these banners as a group. This is our new strategic direction, ‘Powered by Kingfisher’.”