Kingfisher, the owner of B&Q, has seen its pre-tax profits plunge in the first half of this year as the company goes through organisational upheaval.
Pre-tax profits fell 30.1% to £281m. The firm is undergoing a major reorganisation, which it says is being made more difficult by tough trade conditions. The firm also said its overall profit margin had fallen significantly.
Sales were only slightly up on last year to £6bn, while retail profit fell by 13.5 per cent to £404m.
Why it's interesting
Kingfisher is halfway through its “One Kingfisher” programme which it launched to streamline the business and cut costs, with the programme costing around £800m to deliver. It set itself a target of delivering £500m in additional profit but analysts have been sceptical following a series of poor trading updates. Shares have tanked 21 per cent so far this year.
The DIY giant has largely blamed its woes on the poor performance on "weak" business at its French arm Castorama, and on rising stock levels, forcing it to take on additional warehouse space mainly in France.
It said business in the UK and Poland was "solid".
What Kingfisher said
Véronique Laury, chief executive officer, said: "The extent and pace of change in the retail sector is profound. We saw these changes and acted early. We're now halfway through our One Kingfisher transformation and we are well on our way to becoming a truly customer led, digital, and efficient business.
"Transformation on this scale is tough, and there are challenges that we're working through. There is still much to do to improve our performance in France and to remove inefficiencies within the business as we continue to transform at pace. I am confident that we have the right plan and the opportunity for Kingfisher is significant.
"Our H1 results reflect a solid performance in the UK and Poland whilst France remains difficult. Looking to the full year we remain on track to deliver our strategic milestones for the third year in a row and have put actions in place to support our performance. The outlook for our main markets continues to be mixed.
"We firmly believe in the transformation plan benefits and maintain our ambition. The environment is making our task more difficult than expected and we will always take the right decisions for the company in the long-term."