KINGFISHER OWNER HITS TWO YEAR HIGH AS SCREWFIX DELIVERS ON DIY
Shares in B&Q owner Kingfisher have hit a two-year high after the DIY giant reported better-than-expected results. Kingfisher credited a strong performance in Poland and the UK, especially by its Screwfix chain, but said sales in France had been flat.
Sales rose 6.8% to £5.7bn for the six months to 31 July, with pre-tax profit up 13.5% to £436m. Sales in the UK and Ireland sales climbed 3.1% to £2.6bn, thanks largely to good trading at Screwfix.
The company said it had opened 20 new Screwfix stores in Britain, taking the total run by the brand to 477. Kingfisher is nearing the end of a restructuring plan in which 52 of a planned 65 B&Q outlets in the UK have closed.
The company’s shares were up 2.3% in early trading at 385.20p. Kingfisher added it had seen “no clear evidence of an impact on demand so far” since the Brexit vote.
Outside the UK, sales in Poland climbed 11%, but revenue in France – its most profitable market – grew by just 0.3%.
The firm blamed widespread industrial action and wet weather for “a more challenging environment” in France, and chief executive Véronique Laury said she was “cautious” on the country’s short term outlook.
The company is currently implementing its “ONE Kingfisher” transformation plan, which is designed to increase annual pre-tax profits by £500m within five years.
Neil Wilson, an analyst at ETX Capital, called the results “punchy” but questioned whether Kingfisher could “continue to grow and deliver more”.
“It’s very encouraging to see that trade-focused Screwfix led the way [in these results], as this points to a healthy building market [in the UK],” he said.
“But we’re yet to see what Brexit, which came towards the end of Kingfisher’s H1, has really done to the construction sector.”