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Kingfisher reports solid Q2 performance

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Kingfisher has reported on second quarter trading, covering the three months ended 31st July.

Group sales reached £3,026m, up 3.2% in constant currencies and 3.0% in LFL sales. 

UK & IRELAND

Total sales increased by 5% to reach £1,357m, with a 7.2% rise in LFL sales, benefiting from continued strong Screwfix performance

B&Q UK & Ireland sales increased by 0.3% to £1,046m, despite store closures. LFL sales were up 5.6%, including c.2% benefit from sales transference associated with store closures. Seasonal LFL sales increased by 9.6%, while non-seasonal LFL sales, including showroom, were up by 3.4%.

Screwfix sales were up by 24.5% to £311m.  LFL sales were up 13.3%, driven by its leading omnichannel capability, new and extended ranges and new outlets

FRANCE

Total sales declined by -1.4% (LFL -3.2%) to £1,130m.

Castorama sales -2.2% (LFL -3.3%) to £629m reflecting less promotional activity. LFL of seasonal -4.3%. LFL of non-seasonal, including showroom -3.0%.

Brico Dépôt sales -0.3% (LFL -3.1%) to £501m.

OTHER INTERNATIONAL 

Sales in Poland +10.5% (LFL +7.3%) benefiting from a currently supportive market and new ranges. LFL of seasonal +10.7%. LFL of non-seasonal, including showroom +6.5%.

See the full publication here.

Véronique Laury, Kingfisher Chief Executive Officer, said:

“We have delivered another solid sales performance in Q2 driven by the UK and Poland. In the UK, the EU referendum result has created uncertainty for the economic outlook, although there has been no clear evidence of an impact on demand so far on our businesses. In France, widespread industrial action and exceptionally wet weather created a more challenging environment, after a more encouraging Q1. We remain cautious on the short-term outlook.

“In the meantime, we continue to focus on our ONE Kingfisher plan, based on always putting customer needs first. We look forward to updating you on our early progress at our half year results next month.”

Analyst View

David Cheetham from XTB, comments 

“The latest trading update for Kingfisher shows a 3% rise in like for like sales for their fiscal second quarter, and despite some underperformance in their French outlets is overall a robust report.The retail giants flagship store has been the stand out performer, with B&Q reporting a like for like sales increase of 5.6% on a constant currency basis. Despite generating approximately a third of the turnover as its larger counterpart the growth of 13.3% in the same metric for Screwfix is impressive. Overall investors will likely view this report as favourable, with the announcement of £150m of share buybacks so far this year indicating that the firm believe their stock is undervalued. CEO Veronique Laury acknowledges in her comments that the EU referendum has created uncertainty for the economic outlook, but shareholders will be pleased to hear that so far there is no clear evidence of an impact on demand for the business.”  

Martin Lane from money.co.uk comments:

“With a distinct lack of choice and demand outstripping supply in the UK housing market, homeowners are looking to build on and spruce up their existing properties instead, and Kingfisher’s results reflect this. 

“Kingfisher invested wisely when they chose to make a series of DIY videos, giving consumers confidence to take on projects around the home themselves, and they’re reaping the rewards of their efforts.  

“Not all of us have caught the DIY bug though as many of Kingfisher’s customers are independent builders and plumbers. The shift would suggest we are less do it yourself and more get someone in and that our DIY obsession seems to be dwindling. With this in mind Kingfisher has rightly positioned their brands, targeting both consumers and tradesmen.”

Source : Kingfisher
www.kingfisher.com

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18 August 2016

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