Kingfisher raises bottom end of full year profit guidance
B&Q owner Kingfisher has raised the bottom end of its full year profit guidance despite demand for big ticket home improvement products remaining weak.
The group has posted a 1.4% decline in total sales in the six months 31 July with like-for-like sales down 2.4%.
Like-for-like sales of core products at B&Q rose by 1.4% in the period, although sales of big ticket items fell by 11.6%, Core and big ticket like-for-sales at Screwfix both increased with respective uplifts of 1.5% and 0.4%.
Meanwhile, sales in Kingfisher’s business in France, which includes Castorama and Brico Dépôt, dropped by 7.2% like-for-like.
Thierry Garnier, Kingfisher chief executive, said: “Trading overall in the first half was in line with our expectations. This was underpinned by customers continuing to repair, maintain and renovate their existing homes, driving resilient volume trends in our core product categories.
“As expected, demand for ‘big-ticket’ categories has remained weak, in line with the broader market, while seasonal category sales trends have improved since early July. Against this backdrop we maintained a strong focus on effectively managing our costs and inventory.”
The group said UK and Ireland banners continued to gain market share, supported by strong ecommerce sales and progress in addressing the needs of trade customers.
Kingfisher’s adjusted pre-tax profit edged down 0.5% in the period to £334 million. On a statutory basis, pre-tax profit rose by 2.3% to £324 million.
Based on its first half performance and its current view of its trading environments, the group now expects its full year adjusted pre-tax profit to come in at around £510 million to £550 million compared to a previously guided £490 million to £550 million.
Kingfisher said the adjustment primarily reflects the benefit of c.£25 million of business rates refunds at B&Q in the first half of the year.
Giving an update on current trading, the group said like-for-like sales are down by 0.3% in its third quarter to date.
Garnier said: “Reflecting our performance in the first half and our current view of the trading environments in our markets, we have tightened our profit guidance and upgraded our free cash flow guidance for the year. We remain focused on continuing to manage our costs and cash effectively, and driving further market share gains by delivering on our key strategic priorities.”
