B&Q owner Kingfisher half year results show continuing transformation

Sales at B&Q owner Kingfisher in the six months to 31 July were £6,008m, up from £5,749m with underlying profit before tax £440m against £436m - but B&Q UK and Ireland saw sales at £1,875m, down 6.1%, like-for-like -2.3%.

Overall Kingfisher UK & Ireland sales including other businesses were £2,602m, up 1.1% like-for-like and retail profit was £215m, +1.7%.
B&Q UK and Ireland now has 296 stores and 18,000 employees.

First half results reflect 2% like-for-like impact from business disruption in year two of Kingfisher's five year transformation plan, including product clearance.

The B&Q owner said it had moved further towards a unified & unique offer, had positive early customer reaction to new ranges (now at 16% unified cost of goods sold), cost price reduction (CPR) and cost of change in line with expectations.

Margin remained at 37%. Online sales were 5% (4%). A mobile platform is launching soon at B&Q.

Strategy is new products, affordable prices, higher quality and simpler ranges from fewer suppliers.

Outlook remains "cautious" with "mixed macro and UK housing indicators".

Chief executive officer Véronique Laury said: "As planned, this first half has seen a significant increase in the level of transformation activity.

"Changes are now visible in our stores with new product ranges being well received by customers. We are also changing our ways of working alongside the continued rollout of our unified IT platform. The pace is quick and impactful and is reflected in our performance. We continue to have a flexible approach as our transformation progresses, adapting as necessary, and this will support the significant amount of change planned for the second half and beyond.

"Looking across our markets, we have seen solid growth at Screwfix and Poland, offset by continued
weaker sales in France and some business disruption, principally reflecting product availability and clearance. We are aware of and are acting on the causes of this disruption, which we are confident will ease. For the full year, we have self-help plans in place to support our overall performance and remain comfortable with full year profit expectations, though we remain cautious on the second half backdrop in the UK and France.

"We are on track to deliver our full year strategic milestones for the second year in a row. We understand the reality of our customers' lives and are creating a unified and unique offer based on their needs. We are buying as ONE and are starting to see the customer and financial benefits coming through. This is all underpinned by our IT rollout which remains on track, and efficiency benefits which continue to deliver.

"We remain confident in our ability to deliver our five year plan and in the benefits it will generate, supported by our great team of hard-working and enthusiastic colleagues."

Laury said 16% of product by value was being bought together as one global range and that would reach a 20% target by the end of the year.

The target next year is now 40% instead of 55%.

She told Horticulture Week buyers would nevertheless buy the right offer in garden plants for their country, be it Britain, France or Poland. She said it may not be the "best solution to get one big vendor" or source and that the UK was most advanced in best practice in the area.

Laury added that pureplay online rival ManoMano was not a concern but Kingfisher is investing in online, with B&Q at 4% online sales, up 17% this year.

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