Kingfisher’s share price falls 3% after CEO steps down amid declining profits

The DIY specialist has chosen to part ways with its CEO Veronique Laury after the group sees its profits decline in 2018.

Kingfisher has chosen to part ways with its CEO Veronique Laury after unveiling its full-year results, which showed that the DIY specialist is still struggling despite being three years into a five-year turnaround plan to increase profit to £500 million by 2021.

The Screwfix and B&Q owner is yet to pick a departure date for its CEO, with Laury continuing with her responsibilities for the time being. But the news did help send Kingfisher’s share price tumbling more than 3% on Wednesday morning as investors grow impatient.

‘We have achieved radical organisational and behavioural change across Kingfisher over the last three years,’ Laury said. ‘We’ve done this against the backdrop of rapid structural change in retail alongside high levels of macroeconomic uncertainty, which are ongoing.’

‘Navigating these conditions while maintaining focus on a transformation of this scale has required huge commitment from our people,’ she added.

Kingfisher results: key figures

Underlying pre-tax profit at Kingfisher fell by 13% to £639 million in 2018, driven by weak performances in its French business Castorama and losses suffered in Russia and Romania.

‘Castorama France has been disappointing and we are implementing a clear plan to sustainably improve its performance,’ Laury said.

‘Screwfix’s leading omnichannel proposition has consistently delivered strong growth in recent years and we have identified additional expansion opportunities in both the UK and in new markets, initially in the Republic of Ireland,’ she added.

ONE Kingfisher rescue plan fails to impress investors

Over the last 12 months, Kingfisher’s stock has lost around a third of its value, with the group’s management team hoping to boost its bottom line with its ONE Kingfisher turnaround plan.

However, the decision to get rid of Laury in the wake of the group's full-year results suggests that the turnaround strategy has fallen short of the mark for investors.

The five-year plan is expected to cost around £800 million and involved unifying the group’s product range across its various DIY brands, with a focus on boosting online sales and improving overall efficiency.

The group announced that it is now considering closing 15 poor-performing stores over the next two year and closing 19 Screwfix outlets in Germany. It also plans to address the underperformance of Castorama France and other parts of its business.

Much of our focus over the last three years has been on building an ‘engine’ to deliver a superior customer proposition and the agility to succeed in the new retail environment,’ Laury said.

‘Over the next year we will be accelerating our unique product activity and making our innovation more visible to customers including testing new store concepts.’

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.