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Kingfisher: UK & Ireland Performance

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Kingfisher UK & Ireland Results  

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Kingfisher UK & Ireland sales increased 3.7% (LFL +2.4%) to £2,753 million, reflecting a strong recovery in demand in Q2 (LFL +19.6%) following COVID-related temporary store closures and disruption in Q1 (LFL -16.0%).

Gross margin % was up 100 basis points mainly reflecting higher full-price sales and lower clearance in B&Q, partly offset by higher supply & logistics costs in Screwfix. Retail profit increased by 47.1% to £411 million, largely reflecting a decrease in operating costs by 8.8%. Operating costs reduced largely due to cost reduction measures taken following the onset of the coronavirus crisis, the UK government’s business rates relief for retail premises, and staff cost savings arising from the UK government furlough scheme. These savings were partly offset by the impact of overall cost inflation, the space increase at Screwfix year on year, and incremental COVID related costs.

B&Q total sales increased by 3.7% to £1,839 million. LFL sales increased by 4.1%. LFL sales of weather-related categories increased by 13.6% while sales of non-weather-related categories, including showroom, were broadly flat. B&Q’s e-commerce sales grew strongly in H1, increasing by 135% and representing 11% of total sales during the period (H1 19/20: 5% of total sales). Across the business, space remained broadly flat with one new store opening in H1 20/21.

Screwfix total sales increased by 3.7% (LFL -1.1%) to £914 million, reflecting net space growth, with LFL sales impacted by COVID-related temporary store closures and disruption to the trade market. E-commerce sales grew by 160%, representing 80% of total sales during the period (H1 19/20: 32% of total sales). Screwfix orders were taken exclusively online from late March to late July 2020, with all stores closed for in-store browsing and purchasing during that period.

Screwfix’s five stores in the Republic of Ireland, which have opened since December 2019, traded well prior to lockdown restrictions being imposed in March and have traded well since reopening in May.

One net new store was opened in H1 20/21, compared to 16 in H1 19/20, reflecting the decision to temporarily pause expansion due to the coronavirus crisis. 30 store openings are planned for the UK in FY 20/21, and 10 store openings in the Republic of Ireland. The total number of stores is 687, including five in the Republic of Ireland.

Click here for more information on Kingfisher's overall performance.

See the full results publication here

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.”

Source : Kingfisher PLC

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22 September 2020

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