Year-end results from Kingfisher confirm it benefited from the DIY boom over the last year as people worked to improve their homes during lockdowns. However, the owner of B&Q and Screwfix warned that it was unlikely to match this strong growth in the months ahead with it also facing “uncertainty” over economic trends and consumer spending.
During the year to 31 January, the group’s total sales rose 6.8% on a constant currency basis to £12.34bn with like-for-like sales climbing 7.1%. The group said it saw growth across all its banners in the UK & Ireland, France, Poland, Romania and Portugal.
Like-for-like sales at B&Q jumped 13%, whilst Screwfix was up 6.6%.
As with many other retailers last year, Kingfisher’s e-commerce business was the star performer with sales jumping 158%. Online now accounts for 18% of total group sales compared to 8% the previous year.
Pre-tax profit on an adjusted basis rose by 44.4% to £786m, driven by the strong sales growth and cost savings. Retail profit was up 27.4%, largely driven by B&Q’s performance.
Looking ahead, the group said that it expected “distinct performances in the two halves of the coming year” with low double-digit sales growth in the first six months, followed by falls in the second as it faces tough comparatives and weaker market conditions.
However, whilst the exceptional demand from home improvement products seen over the last year is expected to moderate as vaccines are rolled out and restrictions become less prevalent, Kingfisher highlighted that the Covid crisis has established longer-term trends that should support the industry. For example, it expects the trend of home-working to endure, turning people’s homes into a ‘hub’ for life and work.
The group also highlighted the successes of its ‘Powered by Kingfisher’ strategy launched in June 2020 which aims to improve its stores, product offer, and price competitiveness.
Chief Executive Thierry Garnier said: “Kingfisher is coming out of the Covid crisis as a stronger business, with an improved competitive position in all key markets, strong new customer growth and a step change in digital adoption. I would like to express my personal thanks to all our teams for their incredible efforts in the most testing of circumstances.
“We rolled out our ‘Powered by Kingfisher’ strategy without delay and even accelerated in many areas. Our distinct retail banners are now empowered and much more agile, which enabled them to react quickly in what was a volatile situation last year, supported by the scale, strength and expertise of the Kingfisher Group.”
NAM Implications:
- Pragmatic NAMs are budgeting for a minimum work-from-home of 20%.
- Patently wanting to optimise their in-home surroundings.
- A no-brainer opportunity for DIY supply and retail…
- Watch this space.
