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Britons fixing up their homes lift B&Q owner Kingfisher

Kingfisher
Kingfisher

A post-lockdown DIY boom has boosted sales at B&Q owner Kingfisher, sparking a pledge from bosses to repay £23m of furlough cash handed out by the Government. 

Pre-tax profits at the company hit £398m in the six months to the end of July, up 62pc on a year earlier.

This was fulled by strong sales in the second quarter, when like-for-like revenues – which strip out new store openings – jumped by a fifth as customers confined indoors took up home improvement projects to pass the time.

Sales have held up since, chief executive Thierry Garnier said, helped partly by a stamp duty cut that has driven a boom in the property market.

He said: “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.”

The firm was forced to put 50pc of staff on taxpayer-funded furlough schemes across Europe after shutting swathes of stores at the height of the Covid crisis, but is now returning public money it received from the British Government.

Kingfisher was boosted by a 19pc increase in online revenues. These now make up almost a fifth of all of the company’s sales, up from 7pc just a year ago.

Kingfisher is seeking to bolster its e-commerce arm further by dispatching items to customers directly from its branches. It is also launching new store formats including a pilot with Asda to introduce B&Q mini-stores in supermarkets.

The company introduced click and collect when the pandemic struck, a service which is increasingly popular with shoppers.

Shares rose 7.1pc to 283.4p in early morning trading. 

Mr Garnier, who joined last year to revive its fortunes after a botched turnaround under his predecessor Veronique Laury, said: “There can be no doubt that the very specific nature of the crisis has driven demand in the home improvement market.

“It 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.” 

He warned that the firm remains cautious as fears grow for the country’s economic recovery, but added that DIY businesses remain well positioned for future growth. 

Last month Kingfisher started a consultation with 400 to 500 staff in several countries including the UK about their roles, as it seeks to drive more sales. 

Restructuring costs could be up to £20m, but the company expects most people to move into new jobs. 

Mr Garnier insisted there would be more jobs created than lost, as it has been recruiting staff in stores to keep up with demand.

The pandemic has ushered in a new era of online shopping at chains that have historically relied on customer footfall for sales.

White goods retailers AO World and Dixons Carphone, the owner of Currys, PC World and Carphone Warehouse, have seen a similar surge in internet sales. The former said that the crisis had led to a long-term change in how many customers buy electrical products online.

Kingfisher key facts
Kingfisher key facts

James Grzinic, an analyst at Jefferies, said: “Trading into the second half has started with a bang.

“Kingfisher’s first-half results present an upbeat picture in the face of a Covid-impacted world, with strong second quarter sales gain and government support more than outweighing first-quarter closures and Covid costs.”

Total sales fell 1.3pc to £5.92bn, reflecting the impact of the virus when shops were closed.