Kingfisher share price: FY statutory pre-tax profit falls 20.5%

Kingfisher (LON:KGF) has this morning updated investors on its full-year performance, reporting a 20.5 percent slide in pre-tax profits. On an adjusted basis, the group’s pre-tax profit, however, inched 0.3 percent higher. Going forward, the company warned that the outlook for the wider global economy remained uncertain, while the impact of the outcome of the UK EU referendum was unknown.

**Highlights from the company statement:**
Reported retail profit grew by 0.7% including £46 million adverse foreign exchange movement on translating foreign currency results into sterling. Excluding foreign exchange impacts, retail profit grew by 7.4%, reflecting a mixed picture across our major markets with the Poland and UK markets improving, together with a particularly strong performance from Screwfix, offset by soft market conditions in France. Our ongoing focus on cash and tight capital discipline meant we were able to continue to invest in the business, and also return a further £200 million to shareholders (via share buybacks) in addition to the annual ordinary dividend.

Adjusted pre-tax profit, which excludes the impact of exceptional items, increased by 0.3% to £686 million, broadly in line with retail profit, and reflecting £46 million adverse foreign exchange movements.

Statutory pre-tax profit, which includes the impact of exceptional items before tax decreased by 20.5% to £512 million.
Dividends and capital returns

The Board has proposed a final dividend of 6.92p which results in a full year dividend of 10.1p, an increase of 1.0% (2014/15: 10.0p). The full year dividend is covered 2.2 times by adjusted earnings (2014/15: 2.1 times). We continue to be comfortable with medium term dividend cover in the range of 2.0 to 2.5 times, a level the Board believes is prudent and consistent with the capital needs of the business.
Véronique Laury, Chief Executive Officer, said:

“This has been a very productive and important year. We have delivered a good ‘business as usual’ result with both sales and profit growth in constant currencies, driven by our performance in Poland and the UK, driven largely by Screwfix, and a stable performance in France.

“We have also delivered solid progress on the first sharp decisions announced last year. I am really pleased with the focus and the energy that the team has demonstrated during the year.

“In addition, in January we revealed our ambition and our five year plan. By putting customer needs first we will, by the end of that period, deliver a £500 million sustainable annual profit uplift, over and above ‘business as usual’. It is an ambitious plan. However based on the solid progress so far, and the competence and enthusiasm of our colleagues, we feel very confident in our ability to deliver.”

Karen Witts, Chief Financial Officer, said:

“We have set ambitious and clear five year financial targets, which will drive a considerable increase in the value of our business for shareholders. We are tracking our progress against our financial and operational milestones, and we will update as we progress.

“Our balance sheet remains strong, enabling us to continue to invest in the business and in the transformation, whilst also returning surplus capital to shareholders, in addition to the ordinary annual dividend.

“In the short term, the fundamentals of the UK economic backdrop remain positive, although we remain cautious on the outlook for France. The outlook for the wider global economy remains uncertain, and the impact of the outcome of the UK EU referendum is unknown.”
As of 07:09 GMT, Wednesday, 23 March, Kingfisher plc share price is 350.60p.