B&Q owner starts second half of year ‘with a bang’ as it shrugs off pandemic

The owner of B&Q has started the second half of the year “with a bang”, analysts said, as Kingfisher reported only a small hit from the Covid-19 pandemic.

Sales were down by 1.3% in the first six months of the year, Kingfisher said, but pre-tax profit grew by 62% to £398 million.

Most of its revenue hit came in the first quarter of the year, and the business has recovered well since then, even reaching double-digit growth in the third quarter of the year.

“Trading into the second half has started with a bang, with Kingfisher noting that the ‘growth across all banners and categories’ has led to third quarter to date group like-for-like up 16.6%,” said James Grzinic, an analyst at Jefferies.

He added: “Kingfisher’s first-half results present an upbeat picture in the face of a Covid impacted world, with strong second quarter sales gain and government support more than outweighing first quarter closures and Covid costs.”

Chief executive Thierry Garnier said that people had rediscovered their homes during the Covid-19 lockdown.

“It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home.”

Yet, facing uncertainty from the pandemic, Kingfisher suspended the dividend despite a strong showing.

The improvement was largely helped by a huge increase in online sales, which increased by 19% and now makes up 19% of all of Kingfisher’s sales, up from 7% just a year ago.

“Customers are becoming more comfortable with ordering online. And delivering value to consumers is imperative against a challenging economic backdrop,” Mr Garnier said.

“Looking forward, while the near term outlook is uncertain, the longer term opportunity for Kingfisher is significant,” he added.

“There is a lot more to do, but the new team and new plan is now established in the business and we are committed to returning Kingfisher to growth.”