Kingfisher profits fall as chain revamps
Half-year profits at Kingfisher, the owner of B&Q and Screwfix, have fallen 5.9% to £402m amid what the company describes as "disruption".
The company, whose main operations are in the UK and France, is working its way through a five-year plan, which it began 18 months ago.
This includes streamlining the products it offers across its outlets. This has meant offering products it planned to phase out at discounted prices.
Sales across the firm were down 1.3%.
Kingfisher's revamp has included widespread changes to its IT system as well as closing some B&Q stores.
The company says it will deliver a £500m "sustainable" annual profit uplift by the end of 2021, which will cost £800m, but that until it has finished streamlining the business, it will not be able to expand by much.
The plan also includes buying back shares from its investors, a move that typically supports the share price.
It announced it would be looking to buy £60m worth of shares in the next three months.
The company said it was "cautious" on the outlook for the second half of the year.
No break up
Neil Wilson, analyst at ETX Capital, said: "Kingfisher results for the first half were as expected.
"It does look like it is making solid progress on the transformation strategy, with an earlier rollout of the unified IT platform potentially able to produce cost savings sooner than planned."
Some analysts have suggested the company may work better broken up. Screwfix is growing faster than the rest and France's Castorama is underperforming.
But Kingfisher's chief executive, Veronique Laury, said this was "not something we would consider at all".
Kingfisher is the largest DIY chain in Europe.
It employs 25,000 people in the UK and Ireland and 20,000 in France.
It also trades in Poland, Russia, Turkey and Spain and is starting businesses in Romania, Portugal and Germany.