B&Q and Screwfix-owner taps Covid sales bounce but shares fall on product supply shortages

Kingfisher, owner of B&Q and Screwfix, warned about supply shortages on a range of products, including timber and cement

Kingfisher posted sales of £7bn (€8.3bn) in the six months to the end of July, up 20% from a year earlier. File picture

A half-year profits surge at Kingfisher, the owner of the B&Q and Screwfix outlets in Britain and Ireland, continued to reflect a bounce-back from the Covid-19 crisis, but the shares fell sharply as the retail group warned about supply shortages on a range of products, including timber and cement. 

Kingfisher posted sales of £7bn (€8.3bn) in the six months to the end of July, up 20% from a year earlier, and reported retail profits across Europe in the period of £767m, of which £579m were generated in the UK and Ireland. Sales since the start of August had performed strongly despite unfavourable weather, the company added.  

However, its London-listed shares fell by 5% as its chief executive Thierry Garnier highlighted a range of products shortages as the group become the latest retailer or building materials supplier to be caught up in some way in the supply chain disruptions afflicting the global economy this year since the start of the recovery from the Covid crisis. The shares have nonetheless gained 30% this year. 

"We expect inflationary pressures to persist through H2 as higher cost inventory is sold through but as demonstrated in H1 we are committed to maintaining our strong competitive price position," Mr Garnier told reporters. 

Supply chain disruption

He said despite supply chain disruption the group's product availability is currently above where it was in January. However, stocks of timber, cement and some products containing semiconductor chips were still below target levels. 

Kingfisher raised its second half outlook, forecasting like-for-like sales down 7% to 3% versus previous guidance of down 15% to 5%. The company said the third quarter had "started positively", with online sales growth.

"Notwithstanding this good start to the third quarter, we remain mindful of continued uncertainty related to Covid," it said. 

Mr Garnier said he had addressed many of Kingfisher's past issues with "fixes" now complete in the UK and Poland and positive results in France from a strategy to repair ranges.

The group plans to accelerate Screwfix's expansion in the UK and Ireland, targeting more than 1,000 stores from 900 previously, and will open its first Screwfix stores in France in 2022. 

• Irish Examiner and Reuters