Kingfisher posts mixed results as it continues overhaul

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Kingfisher update

Kingfisher has warned over a cautious backdrop in the UK as it delivered mixed financial results while continuing to overhaul the business.

The parent company of B&Q and Screwfix recorded a 0.9 per cent rise in underlying pre-tax profits to £440m in the six months to July 31, boosted by a 4.5 per cent rise in sales to £6 billion.

However, on a constant currency basis, sales declined by 1.3 per cent, while overall like-for-like sales also declined two per cent during the period.

Kingfisher added that its  adjusted pre-tax profits fell 5.7 per cent to £394 million in first half, as it a £46 million bill linked to a  “business disruption” that included the roll-out of a new IT system which put some operations under strain.

Sales across Kingfisher’s UK and Ireland markets dropped 0.4 per cent to £2.6 billion in response to B&Q store closures and transformation pressures,  but on a like-for-like basis it went up 1.1 per cent.

Meanwhile, total UK sales at B&Q were down 6.3 per cent to £1.9 billion over the period, with like-for-like sales falling 2.3 per cent.

However, Screwfix helped offset the pressure with another strong performance, as half-year sales jumped 18.7 per cent to £727 million thanks to the launch of 16 new stores, bringing its total to 533.

The retailer‘s like-for-like sales went up 11.7 per cent, boosted by a 109 per cent and 47 per cent uptick in mobile and click-and-collect sales respectively.

UK retail profit pushed marginally higher, up 1.7% to £215 million for the half-year.

Kingfisher chief executive Veronique Laury said: “Looking across our markets, we have seen solid growth at Screwfix and Poland, offset by continued weaker sales in France and some business disruption, principally reflecting product availability and clearance.

“We are aware of and are acting on the causes of this disruption, which we are confident will ease.

“For the full year, we have self-help plans in place to support our overall performance and remain comfortable with full-year profit expectations, though we remain cautious on the second half backdrop in the UK and France.”

Kingfisher’s five-year transformation plan hopes to deliver a £500 million profit boost by the end of its 2020/21 fiscal year.

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