Kingfisher updates on IT and transformation plan as full-year profit drops

B&Q owner and DIY retail group Kingfisher said its business transformation plans continued apace in the 12 months to 31 January 2018, but adjusted underlying profits were down by 8.1% to £683 million.

The business is now two years into its five-year transformation plan – the second year of its three-year unified IT programme – and said fourth quarter sales were a drag on overall performance for the year.

Sales of £11.6 billion for the reporting period were slightly down on a constant currency basis, as was margin. In the UK, B&Q total sales dropped by 5.3% to £3.49 billion, which was attributed to the group’s store closure programme, while like-for-like (LFL) sales slipped by 2.8% year on year.

Screwfix total sales increased by 16.7% (10.1% on a LFL basis) to £1.52 billion with strong digital growth (mobile +86%; click & collect +38%); one of the reasons cited for the positive performance.

In fact, B&Q's digital proposition which now includes 29,000 available products for one-hour click & collect, performed strongly too. Total digital sales, including home delivery, grew by 11% and now represent 4% of total sales.

Digital update

An IT revamp makes up one key pillar of the Kingfisher transformation plan, and the business offered an update on its progress in this area as part of its full-year results statement.

In the reporting period, the retailer continued with the implementation of a unified IT system which is expected to generate a £50 million annual profit uplift by financial year 2020-21. The process involves investing in its eCommerce platforms, and leveraging Screwfix’s capability across the wider group – including "upweighted digital marketing, improved site search, new checkout and launching new mobile sites".

In the year just gone Kingfisher implemented new back office and supply chain platforms to all Castorama France stores, and this process will be completed in the first quarter of the current financial year. A similar implementation programme began at Brico Dépôt France and Castorama Poland, too.

A new group mobile platform was launched last year, as was a new B&Q mobile app. In France, the website was relaunched in January with the new mobile site soon to follow. Total group digital sales are now at 6%, up from 4% last year.

Meanwhile, in a move to ensure the transformation process keeps moving at pace, Steve Willett was recently appointed to the role of chief transformation officer.

IT-related targets for Kingfisher this financial year are to complete the unified IT platform roll out, complete the new eCommerce roll out in France and Poland, and launch the first of its home improvement services in UK & France.

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