Kingfisher's share price rose by more than three per cent this morning after the DIY giant said its five-year plan was on track.
The company, which owns B&Q and Screwfix, reported adjusted sales of £10.3bn. This was down from £10.6bn in the year to 31 January 2015.
But it reported small increases in retail profit – up 0.7 per cent to £746m – and adjusted pre-tax profit – up 0.3 per cent to £686m.
Kingfisher reported adjusted earnings per share of 22p, up 3.3 per cent from 21.3p. And its full-year dividend was 10.1p, up from 10p.
Why it's interesting
But for the first two years, profits will be hit, net of unclarified "operational benefits". The company estimated a £50m knock in the first year and between £70m and £100m in the second.
The overhaul of the company will carry a total expected cash cost of £800m, but £600m will be returned to shareholders in the next three years through share buybacks, in addition to the annual ordinary dividend.
Kingfisher chief executive Véronique Laury said today that while the plan was “ambitious”, the firm is “very confident” it can deliver.
Kingfisher's share price closed at 350.6p yesterday. It rose more than three per cent to 361.3p at just past 10am this morning.
Jasper Lawler, an analyst at CMC Markets, said Kingfisher had beaten forecasts with its 0.3 per cent growth in pre-tax profit.
He added: "There was some initial disdain for Kingfisher’s turnaround plan but today’s results confirm the company has gotten a head start over its rival Homebase which will later be remodelled into Westfarmers."
What the company 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.