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Kingfisher Half-Year Performance 'Resilient'

B&Q - Chris Warham - shutterstock_242222707 725 x 500.jpg

Kingfisher has published unaudited results for the six months ended 31 July 2020.

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Highlights:

·      Resilient performance in H1 with strong sales recovery in Q2

·      Stronger demand for home improvement across our markets

·      New strategy delivering early benefits

·      Crisis has reinforced our approach, pushing us to be bolder

·      Encouraging progress with our strategic priorities

·      Ongoing focus on managing through COVID-19

·      Confident in the opportunities ahead and committed to returning Kingfisher to growth

H1 20/21 Group results:

·      Sales down 1.1% in constant currency, reflecting adverse impact of COVID-19 in Q1 partially offset by strong recovery in Q2

·      LFL sales down 1.6% with growth in B&Q, Poland and Romania offset by France*, Screwfix, Russia and Iberia*

-      LFL sales up 19.5% in Q2 20/21 with growth in all retail banners except Russia and Iberia

·      E-commerce sales* up 164%; now 19% of total Group sales (H1 19/20: 7%)

·      Retail profit up 17.7% in constant currency, largely driven by lower overall costs and B&Q performance

·      Adjusted pre-tax profit up 23.1%

·      Statutory pre-tax profit up 62.4% after net £17 million of exceptional* charges

·      Free cash flow of £1,042 million, up £838 million, reflecting higher operating profit, working capital inflow of £656 million and lower capex

·      Net debt to last twelve months' EBITDA* of 1.0x (2.0x as at year-end); below 2.0-2.5x medium term target range

·      No interim dividend for H1 20/21 given ongoing uncertainty

"Sharing In Our Future": All colleague share plan

As part of our commitment to build a responsible and inclusive business, we are today launching the 1+1 “Sharing In Our Future” plan, giving our 77,000 colleagues the opportunity to share in our future. All Kingfisher colleagues will be given the opportunity to become shareholders. Following a holding period of one year Kingfisher will match each participant’s investment (awarded one free share for every share bought), up to a value of £1,500.

Thierry Garnier, Chief Executive Officer, said: 

"We delivered a resilient financial performance in the first half of the year, with the adverse impact of COVID-19 in Q1 offset by a strong recovery in Q2. This recovery has continued into Q3 to date, with growth across all banners and categories. 

"The crisis has prompted more people to rediscover their homes and find pleasure in making them better. It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home. It's also clear that customers are becoming more comfortable with ordering online. And delivering value to consumers is imperative against a challenging economic backdrop. 

"Through our new strategic direction our retail banners have gained agility and have leveraged their distinct positioning. This has strengthened our market positions and delivered much improved LFL sales before and after the lockdowns. Our experiences through the crisis have reinforced the benefits of our strategic direction and have made us bolder in our priorities. 

"We have made progress against the strategic plan announced in June. We are fundamentally reorganising our commercial operating model to serve our customers better. We have accelerated our plans around e-commerce, with a focus on fulfilment from stores. We are continuing to improve our operational performance in France, and have introduced new trading approaches at each of our banners. We are testing a number of initiatives, including new concepts, services and partnerships. 

"There remains considerable uncertainty around COVID-19 and our near term priorities have not changed - to provide support to the communities in which we operate, to look after our colleagues as a responsible employer, to serve our customers as a retailer of essential goods, and to protect our business for the long term. We remain proud of, and humbled by, the response of our teams to the current challenges. 

"Looking forward, while the near term outlook is uncertain, the longer term opportunity for Kingfisher is significant. There is a lot more to do, but the new team and new plan is now established in the business and we are committed to returning Kingfisher to growth."    

UK & Ireland performance information available here

Review the publication of the full results here

Source : Kingfisher PLC

Image : Chris Warham / shutterstock.com 242222707 

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.   

22 September 2020

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