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Kingfisher, the owner of B&Q and Screwfix, has reported a surge in sales and profits for 2020 as a locked-down nation turned to home improvements.
Thierry Garnier, the chief executive of Kingfisher, said the company had seen “extraordinary demand” in the past year as people adapted and updated their homes and gardens to cope with new demands prompted by restrictions on travel, socialising, schools and leisure.
The group, which operates about 1,380 B&Q and Screwfix stores in the UK and Ireland as well as outlets in France, Poland, Spain and Portugal, said sales climbed 7.2% to £12.3bn in the year to 31 January. Sales at stores open for more than a year in the UK & Ireland rose nearly 11% as many 18 to 35-year-olds had a go at DIY for the first time using social media for tips and ideas for their new hobby.
Kingfisher reported pre-tax profits of £756m in the year to 31 March, up 634% from £103m the previous year. The profits leap came after heavy one-off costs a year before related to store closures, the sale of the group’s Russian business and property writedowns after years of flagging sales and cost cuts.
Garnier said sales growth would continue over the next five or six months but was then likely to go into reverse in the second half of 2021, as the company would struggle to beat nearly 17% sales growth in the second half of 2020. Nevertheless, Garnierpredicted the DIY revival will outlast the pandemic.
“The Covid crisis has established new longer-term trends that are clearly supportive for our industry,” he said .
“We believe working from home is here to stay. For many, homes have turned into hubs where we work, exercise and rest. A new generation of young DIYers is emerging with increased motivation and new skills.”
He said that Kingfisher would emerge from the crisis as a stronger business and was “well positioned to capitalise on these new and positive market trends.”.
The company said that the pandemic had supercharged its digital business, accelerating the shift to online shopping by two years and attracting 10 million new online customers. Overall web sales grew 158% year on year to account for 18% of total group sales, more than double the 8% share pre-pandemic.
Click and collect sales surged 226% to account for more than three-quarters of all e-commerce sales, up from 62% in the previous financial year.
Earlier in March, Kingfisher said it would be opening 50 Screwfix stores in the UK and Ireland this year, creating 600 new jobs. That comes on top of 2,800 jobs added at B&Q and Screwfix in the past year.
The group is now aiming for 900 Screwfix stores over time, 100 more than previously expected, and up to nine more smaller B&Q stores on retail parks, high streets and within Asda supermarkets in the UK. However, it will downsize some of the largest B&Q outlets. Garnier said the spare space could either be taken up by other retailers or used to create mini online delivery centres for Kingfisher.
Kingfisher announced a total dividend of 8.25p a share, compared with its previous shareholder payout of 3.33p a share. The retailer said its new financial year had started well, with like-for-like sales in the first quarter of 2021 up 24%.
In December, Kingfisher joined other retailers in returning emergency taxpayer support, pledging to repay £130m it received in business rates relief and £25m of furlough payments.
Source: The Guardian
Keyword: B&Q owner’s profits soar as Covid creates ‘generation of DIYers’ | Kingfisher