Kingfisher, the retailer that recently separated its Superdrug and Woolworths businesses, yesterday revealed an 11 per cent fall in profits at its remaining operations, dragged down by its European interests.
Analysts said the figures appeared to negate Kingfisher's strategy, which was based on selling or spinning off underperforming businesses.
The company, led by the chief executive Sir Geoff Mulcahy, announced that pre-tax profit on continuing operations, before exceptionals, dropped from £204.0m to £182.2m, for the six months to 4 August.
Rowan Morgan, an analyst at Teather & Greenwood, said: "The 'new' Kingfisher is going pear-shaped.... There's a lot in there which is just hopeless. Geoff Mulcahy thought that Woolworths and Superdrug were dragging down the rating of his company and that getting rid of them would lead to a re-rating. It hasn't worked."
Kingfisher shares closed up 7.5p at 295p, having lurched to 265p earlier. The stock has fallen from 529p since January.
There were exceptional charges of £526m, resulting from losses on disposals and other provisions, which led to a group pre-tax loss of £355.3m. Within this, demerger costs were £41.0m. The interim dividend was held at an equivalent of 4.345p a share and the final payout is expected to be reduced.
Kingfisher was forced to take a £93.7m write-down on its ProMarkt electrical retailer in Germany. It said the 13 stores it had opened for the chain since it took control two years ago had proved "unsound", and were either in the wrong locations or the wrong size.
The group said the German market was weak throughout the first-half and France had weakened in the second quarter. Sir Geoff added: "Economic slowdowns have worked to our advantage in the past. When the going gets tough, the tough get going."Reuse content