Weaker sales at B&Q and a disappointing performance in France hit profitability at Kingfisher (KGF) as underlying pre-tax profits fell 14.8% to £375m in the six months to 31 July.
Shares in Kingfisher have been marked 6.8% lower to 245.6p as trading is worse than expected.
Davy Research analyst Flor O’Donoghue flags profit was 2% lower than her forecast of £413m.
At B&Q, weather-related products flew off the shelves, up 4.9%, but this was offset by declines elsewhere as like-for-like sales dropped 2.5% to £1.8bn.
In France, weaker trading at DIY group Castorama persisted with a 6% decline in revenues, leading to an overall 2.4% fall in sales to £2.2bn in the country.
It was not all bad news for Kingfisher as Screwfix enjoyed a strong performance, partially driven by robust digital growth of 18% and the continued roll out of new outlets. Like-for-like sales jumped 4.5% to £802m.
‘UNDERWHELMING’ TURNAROUND PLAN
Kingfisher is now halfway through its transformation plan, ONE Kingfisher, and is confident it can generate £50m annual profit uplift by 2020/2021.
Not everyone is convinced.
‘The evidence to date is underwhelming, with any benefits eroded by the end-market challenges,’ comments O’Donoghue.
She argues data on French DIY sales and UK VISA stats suggest ‘little change’ is imminent.
AJ Bell investment director Russ Mould believes some analysts remain optimistic on Kingfisher’s outlook as it could be broken up to generate value, particularly if targeted by activist investors.
Mould says chief executive Veronique Laury is potentially surviving on borrowed time as management are generally shown the door if a company continually underperforms like Kingfisher.
