BORNHEIM (dpa-AFX) - The Hornbach Holding DIY group is taking a cautious approach to the new financial year. The management thus described the start to the spring season as subdued due to the poor weather in most countries. Added to this are persistently high inflation and rising product prices. Hornbach therefore expects earnings to decline. The company had already reported falling earnings in the previous year. The dividend is therefore expected to remain at the previous year's level.

"When we look at the persistently high level of inflation and the rainy weather in March and April in many regions, as well as taking account of the gloomy consumer mood, it must also be clear that success cannot be leased," commented Erich Harsch, boss of the Hornbach Baumarkt subsidiary, which contributes the overwhelming majority of the company's business. Competition in the European retail sector was tough, he added. The manager therefore expects earnings in the first quarter to be significantly lower than in the previous year. Hornbach now intends to focus more closely on its cost base, the manager added.

Hornbach Holding expects sales to be more or less flat overall in 2023/24 (as of the end of February). It could therefore not be ruled out that adjusted earnings before interest and taxes (EBIT) could fall by five to 15 percent, the company announced in Bornheim on Tuesday. In addition to the DIY chain of the same name, Hornbach also operates a much smaller builders' merchant business.

The holding company's share, which is listed on the SDax, lost around 6.8 percent to 70.75 euros in early trading, putting it at the bottom of the second-line index. Two traders referred to management's statements on operating earnings, which were expected to be significantly weaker, especially in the current first fiscal quarter. In addition, one criticized the dividend proposal.

As already announced, sales in the past fiscal year increased by 6.6 percent to 6.26 billion euros. Adjusted EBIT fell by around one fifth to 290.1 million euros as a result of inflation and cost pressure. Hornbach had already presented preliminary figures at the end of March. "As in previous years, the past financial year was also characterized by a high degree of uncertainty. Time and again, we had to act quickly and respond to external factors, some of which were severe," said Albrecht Hornbach, boss of Hornbach Management AG, which also manages the holding company's business.

Net income for the year also fell by 31.4 percent to 167.8 million euros. The company nevertheless intends to pay its shareholders a stable dividend of 2.40 euros./nas/niw/mis