B&Q and Screwfix owner Kingfisher insists trading still strong amid cost-of-living crisis

The Kingfisher group said: "Work is also ongoing to launch the TradePoint proposition in Ireland." 

On Screwfix, Kingfisher said it will open 80 new outlets this year, and plans in time to have more than 1,000 stores open in Britain and Ireland.

Profits at the owner of retailers B&Q and Screwfix tumbled by 30% at the half-year stage, but the households and DIY group insists it is too early to say the cost-of-living crisis is starting to bite. Their shares fell 2.5%. 

The Kingfisher group has significant retail operations in Britain, France, and Poland but includes its operations in Britain and Ireland in the same reporting line. It is therefore difficult to work out whether its British stores are faring worse than elsewhere in Europe, including those in Ireland.            

In its latest earnings report, Kingfisher said net profit fell 30% to £368m (€421m) in the first six months from the same period last year, as sales contracted 4% to £6.8bn. Retail profit fell "largely reflecting very strong prior year comparatives in the UK and Ireland", Kingfisher said.     

The company said that it was continuing to open Screwfix outlets in the UK and Ireland, and developing its TradePoint operations, which focuses on selling products and hiring machine tools to builders. "Work is also ongoing to launch the TradePoint proposition in Ireland," the company said. 

On Screwfix, Kingfisher said it will open 80 new outlets this year, and plans in time to have more than 1,000 stores open in Britain and Ireland. "More broadly, we believe there is a significant opportunity to increase trade customer penetration across all our other retail banners, benefitting from lessons learned in Screwfix and through TradePoint’s successful relaunch," Kingfisher said. 

However, chief executive Thierry Garnier said trading was resilient despite a cost-of-living crisis that is eating into household budgets. He told reporters that sales of all product categories, with the exception of outdoor, had returned to positive like-for-like sales growth over the last week.

"When we look at customer demand we don't see major changes that could show clearly the impacts (of) cost of living," he said, noting customers were not massively trading down to entry priced ranges or to private label products.

He said demand for the 'big ticket' categories of kitchens and bathrooms was robust, while sales of insulation products had soared as consumers seek savings on their energy bills. "Overall, we see a pretty resilient sales trend," he said. 

“Looking to the months ahead, although trading in the year to date has been in line with our expectations, we remain vigilant against the more uncertain economic outlook for the second half," he said. 

Kingfisher made an adjusted pre-tax profit of £472m in the period, a touch ahead of analysts' average forecast and versus a Covid-19 boosted £669m a year earlier.

On a constant currency basis, total sales fell 2.8% to £6.81bn, while like-for-like sales fell 4.1%, having risen 22.8% in the same period last year. The group said it had won market share. It said third-quarter trading was consistent with its 2022-23 adjusted pre-tax profit guidance of about £770m.

Additional reporting Reuters