Kingfisher half-year profits fall as B&Q sales suffer

The home & DIY group reported a 12.5% decline in statutory pre-tax profit to £245m in the six months to July 31, down 6.4% to £353m on an underlying basis.

The retail group’s sales fell 0.8% on a constant currency basis to £6bn during the period, down 1.8% in like-for-like terms as strong sales across Screwfix, Poland and Romania were offset by a “disappointing” sales performance in the UK and France.

Kingfisher attributed its decline in sales to “weak consumer backdrop in the UK and disruption caused by new range implementation at B&Q, and transformation-related issues at Castorama France”.

B&Q sales declined 3.3% to 1.8bn during the period, down 3.2% in like-for-like terms, primarily due to the discontinuation of its installation services. Weather-related items registered a 2.9% fall in sales while non-weather-related items were down 3.4%.

By contrast, Screwfix’s sales rose 9.9%, driven by 16 new store openings in the UK which took its total store estate in the country to 643. Kingfisher aims to open 800 Screwfix stores across the UK overall, is set to open in the Republic of Ireland next year and is mulling a rollout in France and Poland.

Screwfix’s online sales rose 18% during the period and now account for 32% of overall sales.

Kingfisher’s sales across the French division of its business fell 4.2% overall to £2.2bn, driven by 4.3% and 4.2% declines across Castorama and Brico Dépôt respectively.

Digital sales rose 18% across the group, bolstered by a 24% uplift in click-and-collect, and now account for 7% of group sales.

Kingfisher said that, while its gross margin guidance for the remainder of the financial year is unchanged, its outlook across its primary markets “remains mixed”, primarily due to the UK “facing ongoing uncertainty”.

Kingfisher’s new chief executive Thierry Garnier will take up his new role on September 25.

Outgoing chief executive Veronique Laury said: “Our transformation activity continued in the first half of this year, including new range launches across the group and the rollout of further capabilities within our unified IT platform. These activities resulted in some ongoing disruption that impacted sales at B&Q and Castorama France. This was partly offset by positive sales performances in Screwfix, which continues to grow its market share, and Poland.

“It has been a great privilege to lead Kingfisher during a period of significant change, both in retail and within our business, and I would like to take this opportunity to thank all of our colleagues for their tireless commitment.”