B&Q owner removes Russian products as it reveals profits topped £1bn

B&Q owner Kingfisher has revealed profits soared above £1 billion last year as the DIY boom seen throughout the Covid-19 pandemic continued.

Bosses said the extra cash would be handed out to shareholders through dividends and buying up stock to boost the share price, with £550 million returned to investors.

Kingfisher also said it was discussions with suppliers to ensure products were not being sourced from either Russia or Belarus, following the invasion of Ukraine.

The bumper profits will see staff at Screwfix and B&Q stores enjoy 5.4% and 6.5% pay rises respectively.

However, the company saw a marked fall in sales in the three months to the end of January, including a rare drop in sales at its popular Screwfix stores.

Bosses said part of this was due to strong comparisons with a year earlier when lockdowns saw households turn to DIY.

They added that the rise of the Omicron variant saw customers doing more work themselves, with some households wary of letting workmen into their homes and builders getting ill in December.

Chief executive, Thierry Garnier, said: “What we saw during Covid was a boom in DIY and we had a lot more pressure on the trade industry because of the worries of customers having people at home.”

On Screwfix, he added: “Overall Screwfix had a very good year. There were a few weeks at the end of 2021. Because of Omicron a lot of tradesmen were staying at home and a lot of customers were concerned of having tradesmen in their homes.”

Plans are now underway to open 80 new Screwfix stores in the UK and Ireland this year.

The company, which also owns DIY stores in France, Poland, Iberia and Romania, added that since the war in Ukraine started it has removed Russian and Belarusian products from its shelves.

Kingfisher said it was also in discussions with suppliers to ensure products were not being sourced from either country, saying they were “shocked and deeply concerned” at the Ukrainian invasion.

The company sold its Castorama Russia business in September 2020.

Rising inflation has been managed through placing orders in bulk and taking advantage of Kingfisher’s size to secure better terms on shipping containers.

But bosses warned they expect cost pressure to continue into the current year, with inflation likely to rise further as energy and shipping costs remain high.

Mr Garnier said: “It’s all products linked because it is linked to energy prices.

“When you need a high quantity of heat to produce products they are more impacted by inflation.

“You have fewer raw materials, like wood or copper, that are more impacted and then you have the (shipping) container prices (rising).”

The shortage of products also had a small impact during the year, the company added, with raw materials for housebuilding and outdoor ranges particularly impacted.

Overall, it was a strong year for the group, with sales up 6.8% to £13.2 billion and pre-tax profit jumping 33% to £1 billion in the 12 months to the end of January compared with a year earlier.

But most of the growth came in the first half of last year – as the retailer benefited from its essential retailer status while other stores were closed during lockdown periods.

In the UK and Ireland, B&Q sales fell 5.6% in the three months from August to October, and dropped 2.9% in the three months from November to January.

Screwfix grew just 0.2% and fell 4.2% in the same two periods compared with a year earlier, although on a pre-Covid two-year basis both brands remain up.