BORNHEIM (dpa-AFX) - DIY store group Hornbach Holding suffered from customers' reduced propensity to buy in the 2023/2024 financial year. While revenues declined slightly, operating earnings fell more sharply. The company is somewhat more confident for the current financial year. The share price rose by more than six percent in morning trading and was one of the biggest gainers in the index for smaller companies. Since the turn of the year, the SDax group's share price has risen by more than ten percent.

"While the macroeconomic outlook remains gloomy, especially in Germany, we are currently also seeing positive signs", said Albrecht Hornbach, CEO of Hornbach Management AG, on Tuesday at the publication of preliminary figures according to a press release. These include the easing of inflation in recent months and the good weather conditions in the first weeks of the spring season. Hornbach Management AG is the general partner of Hornbach Holding AG & Co. KGaA and also manages the business of the listed holding company.

CFO Karin Dohm also referred to savings. "We also acted very cost-consciously last year and made ourselves even more efficient", she told the financial news agency dpa-AFX. The company will continue to optimize in order to reduce costs. For example, it is investing in IT. In addition, the Group has not filled some positions that have become vacant.

However, the company has also looked to improve its inventories accordingly. "In previous years, when the logistics chains were under a lot of pressure, we built up more stock and bought in earlier," said Dohm. The Group was able to adjust this again last year because the global logistics chains had eased further.

The development of geopolitical crises is relevant for the company, Dohm explained. This applies to both logistics and the development of raw materials. However, the attacks by the Houthi rebels on cargo ships in the Red Sea are not currently having a direct impact on the DIY group's business. Of course, the company is following them closely.

The DIY group is also hardly affected by the slump in new construction. "With Hornbach, we are particularly active in existing properties," explained the CFO. For the company, the major areas of focus include refurbishment, modernization and renovation. Traditional new construction is less important to customers. Around a quarter of customers are professional customers, three quarters are private customers.

In the twelve months to the end of February, Group turnover shrank by 1.6 percent to 6.16 billion euros based on preliminary figures, according to the SDax-listed company in Bornheim, Rhineland-Palatinate. Adjusted for non-operating items, earnings before interest and taxes (EBIT) fell by 12.4 percent to 254 million euros. The Group had expected a decline of this magnitude.

For analyst Thilo Kleibauer from Warburg Research, the adjusted operating result did not fall as sharply as he had expected despite a slight decline in sales. Thanks to the favorable weather conditions, the DIY store group should have made a good start to the new year.

Further details on the past financial year and an outlook for sales and earnings will be published by the Management Board on May 22./mne/nas/mis