Kingfisher profits fell 30% during the first half, as the home improvement group reached a mid-point point in an ambitious five-year turn-over program that is looking to cut costs and increase gains by £ 500m to & # 39; year.
The turnround plan, which is called "One Kingfisher", aims to simplify and unify the ranges between the brands of the retail group, including Castorama and Brico Dépôt in France, and B & Q and Screwfix in the United Kingdom.
On Wednesday, however, the company announced that one of the key executives responsible for the unification of the supply chain and the development of own brand products, Arja Taaveniku, would leave after three years with half of the products of the unified group.
The CEO Véronique Laury recognized that "the transformation on this scale is tough and that there are challenges we are going through", with France, the main source of weakness in both sales and profits, focused on efforts.
Logistics and equity inefficiencies, mainly in France, drove gross margins by 40 basis points from the first half of last year to 36.4%. A "solid" performance in the United Kingdom, where retail profits increased by 1.2 per cent, and in Poland were offset by the weakness of Castorama in France, with the total profit before taxes of the group for the six months down 30 percent annually year at £ 281m. Sales increased by 1.2 per cent in general to 6.1 billion pounds.
Laury said that Kingfisher "remains[ed] on track to deliver our strategic milestones for the third consecutive year and we have put in place actions to support our performance, "but added that" the outlook for our main markets continues to be mixed ".
Actions have been taken to improve performance in France in the second half of the year, said Kingfisher, with better prices on new ranges, better communication with customers and work to be done to improve logistics and warehouse inefficiencies. .
"We firmly believe in the benefits of the transformation plan and we maintain our ambition.The environment is making our task harder than expected and we will always make the right decisions for the long-term business," Laury said.