Kingfisher PLC on Tuesday tightened profit guidance and increased its cash flow outlook after a mixed first half performance.
The do-it-yourself retailer, which owns B&Q, Castorama, and Screwfix, said sales in the six months to July 31 declined 1.8% on-year to £6.76 billion from £6.88 billion. Sales missed the Vuma consensus of £6.81 billion.
But pretax profit increased 2.3% to £324 million from £317 million a year prior. Gross margin improved by 40 basis points to 36.7% from 36.3%.
In response, shares in Kingfisher rose 8.1% to 313.70 pence in London on Tuesday morning.
On a like-for-like basis sales fell 2.4% and dropped 3.8% in the second quarter. In the third quarter to date, Kingfisher said LFL sales were down only 0.3%.
UK & Ireland LFL declined 0.2% in the first half and Poland LFL sales dipped 0.2%. France LFL sales slipped 7.2%, reflecting the soft consumer backdrop throughout the period.
Kingfisher highlighted resilient core category sales, supported by repairs, maintenance and existing home renovation activity. The firm noted a recovery in seasonal sales since early July but weak ’big-ticket’ sales as expected.
‘Trading overall in the first half was in line with our expectations. This was underpinned by customers continuing to repair, maintain and renovate their existing homes, driving resilient volume trends in our core product categories,’ said Chief Executive Officer Thierry Garnier said.
Kingfisher said Screwfix delivered positive LFL sales and TradePoint achieved strong LFL sales growth of 7.1%, now representing 22% of B&Q’s sales.
Looking ahead, Kingfisher predicts adjusted pretax profit for the full-year between £510 million and £550 million, the bottom-end of the range lifted from £490 million. It upped its free cash flow guidance to a £410 million to £460 million range, from £350 million to £410 million previously.
‘With positive early signs of a housing market recovery, notably in the UK, Kingfisher is strongly positioned for growth in 2025 and beyond,’ Garnier said.
Kingfisher said it is on track to achieve around £120 million of cost reductions for the full year, weighted towards the first half.
The company maintained its interim dividend at 3.80 pence per share. It expects to complete its £300 million share buyback by March 2025.
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