Shares in Kingfisher (LSE: KGF) stumbled over 2% on Monday morning as the B&Q and Screwfix owner warned of another year of falling profits and outlined plans to drive cost savings and expand its store footprint.
For the year ended December 31, Kingfisher reported a 22% slump in statutory pre-tax profit to £475 million, while adjusted pre-tax profit tumbled 25% to £568 million. Basic earnings per share declined 24% to 18.2p.
The bleak performance reflected a “more challenging” consumer backdrop in France and Poland that offset positive sales in the UK and Ireland. Like-for-like sales dipped 3.1% to £12.98 billion, dragging retail profit down 20% to £749 million as margins contracted.
Kingfisher now expects adjusted pre-tax profit to fall further in the current financial year, forecasting a range of £490 million to £550 million.
To stem the profit slide, the FTSE 100 firm plans to open 40 new Screwfix stores in the UK and Ireland, with 15 additional outlets in France. In Poland, Castorama aims to add 75 medium-box and compact stores over the next five years, driving a 1.5% to 2.5% annual sales uplift.
The retailer is also targeting around £120 million in additional cost cuts and productivity gains to partially offset higher pay and technology investments. Free cash flow is projected between £350 million and £410 million.
Despite the near-term headwinds, Kingfisher struck an optimistic tone for 2025 and beyond, forecasting free cash flow of £450 million in the 2026 financial year and over £500 million the following year. The dividend was maintained at 12.4p per share.
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