- Encouraging growth against prior year
- Sales well ahead of pre-Covid levels
- Share buyback doubled to £600 million
DIY store operator Kingfisher (KGF) posted a positive trading update for the first quarter against strong prior-year comparatives.
In contrast to most retailers, the firm also sounded a note of confidence in the outlook for the rest of the year, sending the shares up 3% to 254p.
RESILIENT DEMAND
Group sales of £3.25 billion for the three months to 30 April were down 5.4% on a like-for-like basis, in line with company expectations, but 16.2% above pre-pandemic levels thanks to market share gains.
Chief executive Thierry Garnier was upbeat about the firm’s performance: ‘While facing very strong comparatives in the prior year, our continued strategic progress has enabled us to retain a significant proportion of the increased sales during the pandemic.’
B&Q sales were down 18.3% on last year’s first quarter, but they were lapping an 82% increase last year. Against pre-pandemic levels, sales were up 16.3%, in line with the group.
Screwfix sales were down 10.9%, but again they were lapping an increase of 39%, while compared with pre-pandemic levels they were 18% higher.
Sales in France, which make up a substantial part of group revenues now, were down just 3.7% on a like-for-like basis against a 102% increase last year.
The firm said demand was ‘resilient’ in both its DIY and the DIFM (do-it-for-me) and trade segments, while online sales were 164% higher than before the pandemic, accounting for 16% of group revenues.
BUYBACK INCREASED
Encouragingly, the firm said product availability was approaching pre-pandemic levels and it was passing on price increases.
‘We continue to effectively manage inflationary and supply chain pressures. As a result, our product availability is now very close to 'normal' levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices’, added Garnier.
Trading in the first two weeks of May showed an improvement on the first quarter, with like-for-like sales down just 2.5% on last year despite a negative calendar effect, and the firm reiterated its full year pre-tax profit guidance of roughly £770 million.
Also, thanks to the group’s surplus cash position and its confidence in the outlook, Garnier announced it would double the amount of its share buyback to £600 million.
