B&Q sees improved results

B&Q owner Kingfisher has posted underlying pre-tax profit interim profits 13.5 per cent higher at £436 million, with Kingfisher sales up 2.7 per cent and retail profit up 8.7 per cent, in constant currencies for the six months to 31 July 2016.

The firm said in January that it had begun a strategy to boost annual profits by £500 million by 2021 by selling the same products in all the countries in which it operates, reducing costs and growing online sales more rapidly. Kingfisher has stores in France, Spain, Poland and Russia.

Sales for the six months were £5.479bn, up six per cent from £5.382bn.

B&Q, which has 308 stores, total sales declined by 1.9per cent reflecting store closures and sales transference (+4.6 per cent like for like) to £1,997 million.
Like for like sales of outdoor seasonal products were up 1.6 per cent while sales of indoor products, including showroom, were up 5.9 per cent.
B&Q is closing 15 per cent of space by the end of 2015/16. In addition to the 30 B&Q stores closed in financial year 2015/16 a further 22 stores were closed in the first half .

Chief executive Véronique Laury said the strategy is going according to plan following a rise in sales in the UK and Poland:

"It has been a productive first half. We have delivered a good 'business as usual' result with both sales and profit growth. Performance has been driven by Poland and the UK, especially Screwfix, and a stable profit performance in France. This has been achieved alongside managing the start of our ambitious transformation plan, based on creating a unified company where customer needs come first.

"In the UK, the EU referendum has created uncertainty for the economic outlook, even though there has been no clear evidence of an impact on demand so far on our businesses. In France we remain cautious on the short term outlook.

"Looking longer term, we are starting to build solid foundations to enable us to deliver our five year transformation, which is our key growth driver. We are making good progress on our strategic milestones for this first year and we are on track. The level of transformation activity will increase significantly, however given the expertise and energy of our colleagues we continue to feel confident about the challenges ahead."

The company is spending about £70 million this year and £100 million next year to harmonise products. 

Kingfisher said: "We have started unifying our offer, with the same products, presented everywhere in the same way. This will deliver significant customer benefits (newer products, higher quality, better sustainability, lower prices, simpler ranges, clearer merchandising and better packaging) alongside significant business benefits (higher sales, fewer SKUs, fewersuppliers, cost price reduction (CPR) and improved processes).

New competition for B&Q is on the horizon from Bunnings, which bought B&Q rivals Homebase this year.

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