B&Q owner to pay back Covid relief to Irish Government

B&Q owner Kingfisher said it would repay Irish Covid supports.

The owner of the B&Q and Screwfix home improvement and DIY retail chains has said it will pay back Covid supports it received from the Irish Government when its stores were closed due to the pandemic restrictions earlier in the year.

Kingfisher said it would return in full the business rates relief it received from both the Irish and UK governments as a result of the Covid crisis.

The group said its total combined annual business rates bill eligible for the relief, across both countries, is approximately £130m (€144m), of which about £110m will be repaid in its current financial year.

Kingfisher has already repaid in full £23m it received under the UK’s job retention scheme.

'Significant adverse impact'

Kingfisher said closing its stores had a “significant adverse impact” on its trading performance, but since reopening has seen a strong sales performance boosted by higher demand for home improvement products.

“Kingfisher benefited from, and was thankful for, the financial support measures it received from the UK and Irish governments which, together with our own measures to reduce costs and preserve cash, helped us to protect jobs and limit the financial impact of Covid-19, in the face of significant uncertainty,” the group said.

“While uncertainty remains in the markets in which we operate, we are confident that we can address the key risks we face, and that as our strategy is delivered we will be able to continue to grow our business,” it added.

"Government support through this crisis has been invaluable for many companies, including ours,” said CEO Thierry Garnier, adding that returning the UK and Irish business rates relief in full “is the right thing to do”.

Kingfisher said, on the back of the repayments, it expects adjusted profit for its current year to include about £85m in cost savings, half of what it originally anticipated.

Kingfisher's move follows Woodie's DIY owner Grafton Group repaying the Irish Government more than €2.5m in Covid relief in August, mainly from wage supports.

Meanwhile, British fashion retailer Ted Baker has cut 953 jobs as coronavirus lockdowns sent first-half losses soaring, warning of the potential for further pain from a no-deal Brexit as the EU divorce deadline looms. It is not known whether its Irish stores are affected.

Accounting scandal

The coronavirus crisis compounded difficulties for the company, which has been hit by profit warnings, management changes and an accounting scandal since founder Ray Kelvin stepped down as CEO in 2019 after misconduct allegations.

Ted Baker, known for suits, shirts and dresses with quirky details, said its pre-tax loss widened to £39m (€43m) in the six months to August 8, against £2.7m a year earlier.

With Britain’s full exit from the EU only weeks away and a trade deal still hanging in the balance, Ted Baker warned that, in a worst-case scenario, full-year profit could take a £16.1m hit.

• Additional reporting Reuters