Strong demand in Britain and Poland helped Kingfisher to beat forecasts for first-half profit but Europe’s largest home improvement retailer said it remained cautious on the outlook for France, its most profitable market. Total sales at B&Q slipped 1.9% overall to £2bn due to planned store closure but on a like-for-like basis they were up 4.6%.
Advertisement
During the six months ended 31 July 2016, the DIY group reported sales up 2.7% to £5.75bn and retail profit growing 8.7% to £464m. On Tuesday (20 September), she said the strategy, which will cost £800m over the next five years, was on track as was the company’s plan to return capital to shareholders over the next three years through share buybacks.
Chief Executive Veronique Laury had outlined the transformation plan in January, looking to boost Kingfisher’s profit by 500 million pounds ($650 million) a year from 2021.
In the United Kingdom and Ireland, Kingfisher saw same-store sales rise 6.7% thanks to a “broadly supportive backdrop” and a sales surge at its Screwfix chain.
Pre-tax profits at the group, which also owns Screwfix, rose 10.6% to £427 million during the period.
Poland and the United Kingdom drove what the company described as a productive first-half performance, especially United Kingdom trade counter business Screwfix, while France achieved a stable profit. The plan includes unifying its product offering across the group, improving its ecommerce capabilities and efficiency, and closing underperforming stores.
Chief executive Véronique Laury said: “In the United Kingdom, the European Union referendum has created uncertainty for the economic outlook, even though there has been no clear evidence of an impact on demand so far on our businesses”.
Advertisement
In France the firm remains cautious on the short term outlook. “The level of transformation activity will increase significantly, however given the expertise and energy of our colleagues we continue to feel confident about the challenges ahead”.
