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Kingfisher: Strong Performance Versus Pre-Pandemic Levels

B&Q trolley basket

Kingfisher has published its first trading update for 2022/23, covering the three months ended 30th April 2022.

Key points

  • Sales significantly ahead of pre-pandemic performance (3-year LFL +16.2%), supported by strong market share gains

  • Sales of £3.2bn in line with our expectations (total sales -4.2% in constant currency and LFL -5.4%)

  • Good momentum into the second quarter with 3-year LFL +21.8%, and LFL -2.5% for the 2 weeks to 14 May 2022 including a c.1% adverse calendar impact

  • Resilient demand from both DIY and DIFM/trade segments

  • Omni-channel engagement remains high with e-commerce sales 3-year growth of 164%; representing 16% of Group sales (Q1 19/20: 7%)

  • Continuing to manage inflation pressures effectively

  • Good product availability, approaching pre-pandemic levels

  • Full year guidance reiterated; anticipate FY 22/23 adjusted pre-tax profit of c.£770m

  • Announcing return of a further £300m of surplus capital via a share buyback programme; first tranche to commence soon

Unaudited Q1 22/23 sales (three months ended 30 April 2022) 

 /live/news/wysiwyg/23-05-2022 KGF.JPG

Q1 trading highlights

All commentary below is in constant currency.


Total sales -14.1% (LFL -15.8%; 3-year LFL +16.7%). Significant market share gains over the past two years, and good retention of revenue from new and existing customers. 

B&Q sales -17.8%. LFL -18.3% (3-year LFL +16.3%), reflecting very strong prior year comparatives and the impact of storms in the UK in February. Good performance across all categories on a 3-year basis, in particular in the building & joinery, outdoor and bathroom & storage categories. Own exclusive brands (OEB) performed well in the quarter, supported by resilient demand in the kitchen and bathroom & storage categories. 

LFL sales of weather-related categories were -28% (+25% on a 3-year LFL basis). LFL sales of non-weather-related categories, including showroom, were -14% (+13% on a 3-year LFL basis). TradePoint, B&Q’s trade-focused banner, continued to outperform with LFL sales -8% and 3-year LFL sales +32%. TradePoint sales were 21% of B&Q sales in Q1.

Screwfix sales -7.0%. LFL -10.9% (3-year LFL +18.0%), with resilient demand from trade customers and despite very strong prior year comparatives. Strong 3-year performance in tools & hardware and EPHC (electricals, plumbing, heating & cooling) categories. During the period, Screwfix continued to roll out Screwfix ‘Sprint’, with good results. ‘Sprint’ offers customers an industry-leading 60-minute home delivery service (average delivery time c.45 minutes), currently covering 40% of the UK population. Screwfix opened 13 new stores in Q1 in the UK and Republic of Ireland, and remains on track to open 80 new stores in these countries during this financial year. The business will also open its first stores in France in the second half of 2022.

Click here for more information on Kingfisher France and International performance.

Thierry Garnier, Chief Executive Officer, said: “Kingfisher has delivered a good first quarter of trading, with LFL sales 16.2% ahead of our pre-pandemic performance. While facing very strong comparatives in the prior year, our continued strategic progress has enabled us to retain a significant proportion of the increased sales during the pandemic.

“We continue to effectively manage inflationary and supply chain pressures. As a result, our product availability is now very close to ‘normal’ levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices.

“Looking forward, we are reiterating our profit guidance for FY 22/23. We are focused on delivering on our strategic objectives and growth initiatives, including the growth of our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, further increasing our trade customer base.

“We remain committed to delivering attractive returns for our shareholders and are today announcing a further £300m share buyback programme. This reflects our strong cash generation and our confidence in the Group’s outlook.”

Current trading and outlook

The Group has good momentum going into the second quarter. For the 2 weeks to 14 May 2022(6) LFL sales were -2.5% (including a c.1% adverse calendar impact) and +21.8% on a 3-year basis. Demand remains resilient and trading in all banners and across all customer segments (DIY and DIFM/trade) is in line with our expectations, supported by strong execution and much improved product availability.

Looking ahead, we remain mindful of the heightened macroeconomic and geopolitical uncertainty that has emerged since the start of the year. Our priority remains top line growth, and strong and consistent execution. We are targeting further share gains in our markets, and continue to focus on our strategic objectives and investments for growth.

We are committed to continue managing our gross margin effectively in an inflationary environment, as we did successfully last year. Furthermore, we remain active and responsive in managing our operating cost base. As a result of the above, we are reiterating our profit guidance for this year: we anticipate FY 22/23 adjusted pre-tax profit (7) of c.£770m. 

New £300m share buyback programme

In line with our capital allocation policy, the Board has determined that there is surplus capital available to return to shareholders. Further to the ordinary dividend(8) and the recently completed £300m share buyback (as announced on 28 April 2022), the Board is pleased to announce the return of a further £300m of surplus capital via a share buyback programme. The first tranche of this programme will commence soon.

Board appointment

Kingfisher has appointed Bill Lennie as a Non-Executive Director, with effect from 1 May 2022. Bill retired in 2021 after 26 years of service with The Home Depot, most recently as Executive Vice President, Outside Sales and Services. During his time there, Bill held many senior leadership roles including President, Canada and Senior Vice President, International Merchandising, Private Brands and Global Sourcing. Bill has also been appointed as a member of the Audit and Nomination Committees.

‘Teach-in’ event on 5 July 2022
Kingfisher is hosting an in-person ‘teach-in’ event for analysts and institutional investors, on the afternoon of Tuesday, 5 July 2022. The event will take place in London, and will provide deeper insights into the e-commerce/technology and Responsible Business pillars of the ‘Powered by Kingfisher’ strategy.

Income statement:

• Space
− Anticipate net space growth to impact total sales by c.+1.5%, largely from Screwfix and Poland

• New businesses
− Anticipate ‘Other’ retail losses of c.£20m (FY 21/22: £10m). ‘Other’ consists of the consolidated results of NeedHelp, Screwfix International, and franchise agreements, and is recorded within the ‘Other International’ division
− Anticipate retail loss of c.£5m in relation to investment in B&Q’s e-commerce marketplace, recorded within the results of B&Q in the ‘UK & Ireland’ division

• Central costs
− Expected to be broadly flat year on year (FY 21/22: £60m) 

• Net finance costs
− Expected to decrease by c.£15m mainly as a result of lower lease liability interest rate (FY 21/22: £137m)

• Adjusted pre-tax profit
− Anticipate full year adjusted pre-tax profit(7) of c.£770m

• Tax rate
− Group adjusted effective tax rate expected to be c.22%(10) (FY 21/22: 22%)

Cash flow:
• Capital expenditure – targeting gross capex of c.3.5% of total sales (FY 21/22: £397m)

• Tax – in February 2022, a payment of €40m was made to the French tax authorities with regards to a historic tax liability. The amount was fully provided for in prior periods

• Share buyback – c.£445m outflow for share buybacks (c.£145m for previous programme completed in April, and further £300m announced today) 

• Dividend – dividend policy target cover range of 2.25 to 2.75 times, based on adjusted basic earnings per share

Source : Kingfisher

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23 May 2022

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