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Investing.com -- Kingfisher Plc (LON:KGF) reported a £73 million goodwill impairment on its French Castorama unit on Tuesday as the British home improvement retailer posted a 6% rise in full-year adjusted pre-tax profit to £560 million, with its UK banners masking deepening weakness in its second-largest market.
France, which accounts for roughly 30% of group sales, saw its DIY market decline approximately 3% in the year ended Jan. 31.
Castorama France posted a retail profit margin of 2.5%, far below the company’s own medium-term target of 5% to 7%, which management said depended on "the pace of the market recovery."
Statutory pre-tax profit rose 23% to £378 million. Adjusted earnings per share climbed 14.9% to 23.8 pence.
B&Q and Screwfix drove group performance, with total sales up 4% and 4.5% respectively. Combined UK and Ireland retail profit rose to £575 million, though the comparison was flattered by £33 million in prior-year business rates refunds that did not recur.
Group gross margin expanded 80 basis points to 38.1%. Free cash flow was broadly flat at £512 million. Net debt to adjusted EBITDA fell to 1.4 times from 1.6 times.
Kingfisher also wrote down its 50% Turkish joint venture Koçtaş to nil, booking a £19 million charge, and recorded a £31 million loss on the May 2025 disposal of its Romanian business for gross proceeds of £53 million.
The company’s full-year dividend held flat at 12.40 pence per share, equating to a cover of 1.9 times, below its stated target range of 2.25 to 2.75 times.
Kingfisher announced a new £300 million share buyback programme, its fourth since September 2021, bringing total buybacks to £1.2 billion.
Chief executive Thierry Garnier said the company delivered "profit growth of +13% when excluding last year’s business rates one-off and strong free cash flow."
For the year ahead, Kingfisher guided adjusted pre-tax profit of £565 million to £625 million and free cash flow of £450 million to £510 million.
E-commerce sales reached 21% of total group sales at £2.74 billion. Trade sales grew to £3.89 billion, representing 30% of revenue.