DIY retailer announces impending replacement of CEO.
Kingfisher shares fall 2% amid concerns over profits and performance as CEO departs
- Failure to improve French performance and profit margins display a cause of concern for Kingfisher investors.
- Strong growth for Screwfix provides some scope for optimism.
- Shares remain a ‘hold’ for investors willing to accept a medium level of risk.
DIY retailer Kingfisher bowed to growing pressure today by announcing that it had begun the process of replacing its CEO Veronique Laury. Disappointment over the failure to improve the performance of the French operations alongside news that the company is unlikely to achieve the £500m increase in profits expected from a long-running transformation plan may have played a part in the timing of the decision. Kingfisher also reported a 0.3% rise in full-year revenue to £11.7bn and a slightly better than expected 13% drop in pre-tax profits to £693m.
The news of Laury’s departure is a positive for investors, although no firm date was set by the company today. The scale of the challenge facing her successor was highlighted by the 7% decline in Castorama’s sales and the failure to improve overall profit margins could be the reason for the 2% share price drop in early trading. On a lighter note, the growth of Screwfix remains strong, with plans to open stores in Ireland, however, the shares remain no better than a hold for investors willing to accept a medium level of risk.
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