Kingfisher profit boosted as pandemic drives DIY rediscovery
- The pandemic has meant people are spending more time at home, they have fewer leisure options and are traveling less.
LONDON: The COVID-19 crisis has prompted consumers to rediscover the joy of home improvement, do-it-yourself (DIY) retailer Kingfisher said, as it reported a 23pc jump in first half profit.
Shares in the group, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, were up 7pc at 0905 GMT on Tuesday, extending 2020, gains to over 30pc, after it also said strong second quarter sales had continued.
Like-for-like sales in the second quarter to July 31 soared 19.5pc and are up 16.6pc in the third quarter so far.
The pandemic has meant people are spending more time at home, they have fewer leisure options and are traveling less.
"The crisis has prompted more people to rediscover their homes and find pleasure in making them better. It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home," said Chief Executive Thierry Garnier.
The crisis has also boosted shopping online.
Kingfisher's e-commerce sales soared 164pc in the first half and now represent 19pc of total sales versus 7pc in the same period last year.
The group made a first-half adjusted pretax profit of 415 million pounds ($531 million), beating analysts' expectations and up from 337 million a year earlier.
Total sales fell 1.3pc to 5.92 billion pounds, reflecting the impact of the virus in the first quarter when stores were closed.
Kingfisher ended the half with more than 1 billion pounds of cash, and access to around 3.5 billion pounds of total liquidity.
Given its financial position the group intends to pay back to the government its UK job retention furlough claim of 23 million pounds in the second half.
It is not, however, paying an interim dividend and Garnier said it was too early to say if there would be a full year payout.
"Looking forward, while the near term outlook is uncertain, the longer term opportunity for Kingfisher is significant," he said.
Garnier said the focus would be on smaller format stores.
He said he was encouraged by the trial of three B&Q 'Express' stores in Britain and wants to trial other smaller formats in other countries.
He added that forming "shop in shop" partnerships with other retailers, along the lines of a recent deal with supermarket Asda, and further developing click and collect and home delivery services from stores were also key focuses.
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