- UK revenue continues to rise
- Company gaining market share
- Full-year profit target confirmed
Home improvement retailer Kingfisher (KGF) pleased investors by maintaining its full-year outlook even after seeing slightly soggy sales in the three months to the end of April.
The shares gave up 0.6p or 0.2% to 263.5p, a slightly better performance than the FTSE 100 which took a breather having opened 0.25% lower.
POSITIVE UK SALES
Group first-quarter sales hit £3.3 billion, an increase of 0.3% on a constant-currency basis but a dip of 0.9% on a like-for-like basis, as market share gains at B&Q and Screwfix were offset by weakness in France, although Poland saw an improving sales trend during the quarter helped by a stronger DIY market.
UK sales were up 2.6% on a reported basis and 1.2% on a like-for-like basis at £1.63 billion, with a particularly strong showing from Screwfix which saw a 6.3% increased in reported revenue thanks to new store openings on top of underlying growth, and an 8.5% improvement in like-for-likes at TradePoint.
Sales in France were down 8.1% to £1.03 billion, in line with the market and the company’s internal forecasts, but the firm noted an improvement over the previous quarter and is pushing ahead with new Screwfix openings and its e-commerce offering at Castorama.
Other international sales were up 7% to £605 million led by a strong increase in Poland, which makes up the bulk of the division, as consumer sentiment and the RMI (repair, maintenance and improvement) market recovers.
Across the group, core sales – which make up two thirds of the total – were roughly flat but up on the previous quarter, while big-ticket items were softer but seasonal sales were ‘resilient’ despite the poor weather in April.
ON TRACK FOR THE FULL YEAR
Trading in May has been in line with the first quarter, and the firm is keeping its cautious outlook due to the lag between housing demand and home improvement demand including its guidance for full-year pre-tax profit (between £490 million and £550 million) and free cash flow (£350 million to £410 million).
For the rest of 2024 the company’s focus is on growing ahead of its markets by leveraging its in-store and online offering together with selected new-store openings, as well as reducing costs and improving productivity by around £120 million in order to offset investments in technology and people.
