Kingfisher Plc recorded a £73 million goodwill impairment linked to its French Castorama business as it disclosed full-year results showing a 6% rise in adjusted pre-tax profit to £560 million. The British home improvement group highlighted a mixed performance across markets, with stronger trading in the UK offset by a notably softer environment in France, its second-largest market.
France represents about 30% of Kingfisher's group sales, and the company said the DIY market in that country contracted by roughly 3% in the 12 months to Jan. 31. Castorama France delivered a retail profit margin of 2.5%, significantly below Kingfisher's stated medium-term target range of 5% to 7%. Management tied progress toward that target to "the pace of the market recovery." The company recorded a £73 million goodwill impairment against the Castorama unit as part of the annual results.
On a statutory basis, pre-tax profit rose 23% to £378 million. Adjusted earnings per share increased 14.9% to 23.8 pence. The group pointed to the performance of its UK banners as a primary driver of results: total sales for B&Q increased by 4% while Screwfix sales rose by 4.5%.
Combined retail profit in the UK and Ireland climbed to £575 million. Kingfisher noted that part of the year-on-year comparison was affected by the absence of a £33 million business rates refund that had benefited the prior year.
Group gross margin widened by 80 basis points to 38.1%. Free cash flow was broadly unchanged at £512 million. The group's leverage improved, with net debt to adjusted EBITDA declining to 1.4 times from 1.6 times.
The company also booked several non-operational charges in the year. It wrote down its 50% Turkish joint venture Koçtaş to nil, recognising a £19 million charge. Additionally, Kingfisher recorded a £31 million loss on the disposal of its Romanian business in May 2025; the sale generated gross proceeds of £53 million.
Kingfisher kept its full-year dividend flat at 12.40 pence per share. The company said this equates to a dividend cover of 1.9 times, below its target range of 2.25 to 2.75 times. At the same time, the board approved a new £300 million share buyback programme, the fourth such programme since September 2021, taking 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 provided guidance for adjusted pre-tax profit in a range of £565 million to £625 million and forecast free cash flow of £450 million to £510 million.
Digital and trade channels continued to form a material part of the group’s revenue mix. E-commerce sales accounted for 21% of total group sales, reaching £2.74 billion. Trade sales grew to £3.89 billion, representing 30% of revenue.
While the UK banners underpinned headline growth and margins expanded at a group level, the sizeable goodwill write-down in France and additional international charges underline the uneven recovery across Kingfisher's markets. Management has balanced shareholder returns through a dividend and fresh buybacks even as dividend cover sits below the company’s stated range.