B&Q owner Kingfisher’s profits slump nearly 40 per cent although Covid backlog may yet boost DIY chain’s bottom line
B&Q owner Kingfisher reported a sales slowdown as the DIY giant felt the hit from Brits scaling back on home improvements.
For the year ending 31 January 2023 Kingfisher, which also owns brands such as Screwfix, posted pre-tax profits of £611m, down 39.3 per cent from £1.7bn in the same period last year.
As shoppers felt the hit from soaring inflation, sales were also down nine per cent to 13.05bn compared to £13.18bn in 2021. Its retail profit also dipped 19.7 per cent to £923m for the year.
The listed retailer had previously indicated its sales and profits have weakened over the past year, largely due to the DIY demand from locked-down customers starting to soften.
Despite this, Thierry Garnier, chief executive of Kingfisher, said the group remains “confident” about the outlook for the year ahead and is looking to accelerate its store openings across mainland Europe and the UK – with some 25 Screwfix sites set to open in France this year.
Moreover, Kingfisher saw a like-for-like sales increase 1.9 per cent in February.
Garnier said: “We have maintained a sharp focus on pricing to deliver value to our customers during this challenging period for household finances, while at the same time managing our cost inflation pressures effectively.”
Investor confidence in the listed retailer has also appeared to recover this morning, with shares in the group rising 0.46 per cent.
Zainab Atiyyah, analyst at Third Bridge, said: “2023 will be very difficult for the UK home improvement sector, particularly for DIY players.
“The cost-of-living crisis and slowdown in property markets are going to put a big dent in the sector’s growth outlook. Kingfisher will be thankful that the trade side is slowing less, thanks to the massive Covid backlog of home renovations still taking place. ”