Kingfisher reveals one other £300m share buyback scheme as trading stays ‘resilient’ despite slowdown
- Kingfisher’s first-quarter LFL online sales have climbed by 164% since 2019
- For the last two years, the DIY industry has benefited from a surge in business
- A short lived stamp duty holiday within the UK also spurred demand for DIY products
Screwfix owner Kingfisher will soon begin repurchasing one other £300million of its shares, lower than a month after completing a buyback programme of the identical size.
The FTSE 100 home improvement retailer finished a separate £300million share buyback scheme in late April when it returned £75million in surplus capital to shareholders.
For the last two years, the DIY industry has benefited from a surge in business as people have spent increased time at home and collected extra savings when lockdown restrictions remained tight.
Latest scheme: Screwfix owner Kingfisher only just finished a separate £300million share buyback scheme in late April when it returned £75million in surplus capital to shareholders
Demand has been further spurred by a growing desire amongst Britons to live in additional spacious properties and a short lived stamp duty holiday introduced by the UK Government in the summertime of 2020.
Consequently, Kingfisher’s total like-for-like revenues within the three months to the top of April have climbed by 16.2 per cent, when measured against the equivalent period three years ago, to £3.2billion.
All the company’s territories and types have seen a big growth in business, but there was a very strong expansion in online sales of 164 per cent.
Yet trade has began to slide as Covid-19 restrictions have been loosened, resulting in Kingfisher’s share price plummeting by greater than a 3rd up to now 12 months, although Kingfisher shares closed up 2.2 per cent to 252.2p on Monday.
The London-based group, which also owns B&Q and French DIY chain Castorama, reported today that its overall sales fell by 5.8 per cent in comparison with the identical time last yr.
Within the British Isles, Kingfisher’s biggest market, revenues slumped 14.2 per cent after climbing by two-thirds in 2021, with B&Q seeing sales tumble 17.8 per cent to slightly below £1billion and Screwfix sales falling by 7.1 per cent to £572million.
Weaker Trade: Revenues at B&Q tumbled by 17.8 per cent to slightly below £1billion in the primary quarter following a robust prior comparative performance last yr
Outside of the UK and Ireland, sales within the firm’s Brico Depot division in France declined by 9.3 per cent after doubling within the previous yr, while demand in its Iberian and Romanian markets also dropped.
Nevertheless, revenues shot up by over half in Poland on account of higher purchases of products in weather-related categories, expanding market share, and stores not being affected by any interim closures.
Chief executive Thierry Garnier said: ‘While facing very strong comparatives within the prior yr, our continued strategic progress has enabled us to retain a major proportion of the increased sales in the course of the pandemic.’
For the reason that start of the present quarter, Kingfisher said revenues have grown by 21.8 per cent on pre-Covid levels as trading has ‘remained resilient’ and according to forecasts across all brands and segments.
Consequently, it still expects to post around £770million in adjusted pre-tax profits this fiscal yr, a major decline from the previous 12 months but a bigger amount than it earned prior to the pandemic.
The corporate acknowledged the heightened economic and political uncertainty that has emerged for the reason that yr began, yet claimed it was managing cost rises and provide chain problems ‘effectively’ and product availability approaching pre-Covid volumes.
AJ Bell investment director Russ Mould said: ‘It was all the time going to be a tricky ask for B&Q-owner Kingfisher to match the extraordinary period in 2021 when it was one in every of the few shops capable of operate, and folks’s desire to do up homes they’d been stuck in during lockdown reached a zenith.
‘Sales are proving more resilient than some may need feared. This implies there continues to be some pent-up demand for home improvement despite the pressures on household budgets.
‘While inflationary pressures are a challenge which the corporate is having to administer, it appears like the provision chain problems which had been dogging the DIY sector, like so many others, is no less than beginning to ease.’
Downturn: As Covid-19 pandemic restrictions have loosened, Kingfisher’s share price has began to slide, plummeting by greater than a 3rd up to now yr
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