Kingfisher (KGF.L), owner of DIY giant B&Q, reported a surge in pre-tax profit and online sales as Brits rush to renovate their homes amid the coronavirus pandemic.
The group said in its first half results statement that while sales were down 1.1%, reflecting an adverse impact of COVID-19 in the first quarter, this was partially offset by strong recovery in Q2.
Like-for-like sales also fell 1.6% in the first quarter but growth in B&Q across Poland and Romania and a 19.5% surge in sales in the second quarter offset some of the pain.
E-commerce sales also rocketed 164% and now accounts for 19% of total group sales in the first half of 2020, as people turned to online shopping during the coronavirus lockdown.
Retail profit also rose 17.7%, largely driven by lower overall costs and B&Q performance while adjusted pre-tax profit rose 23.1%.
“We delivered a resilient financial performance in the first half of the year, with the adverse impact of COVID-19 in Q1 offset by a strong recovery in Q2. This recovery has continued into Q3 to date, with growth across all banners and categories,” said Thierry Garnier, CEO of Kingfisher.
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“The crisis has prompted more people to rediscover their homes and find pleasure in making them better. It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home. It’s also clear that customers are becoming more comfortable with ordering online. And delivering value to consumers is imperative against a challenging economic backdrop.”
The group highlighted its strategic plan, which was originally unveiled on 17 June 2020, which includes a fundamental reorganisation of Kingfisher’s commercial operating model and the rollout of its own exclusive brands (OEB) including new kitchens, lighting and storage ranges to take advantage of Brits’ appetite for DIY.
It also plans to accelerate e-commerce growth initiatives in response to COVID-19 due to the surge in online sales.
“There remains considerable uncertainty around COVID-19 and our near term priorities have not changed — to provide support to the communities in which we operate, to look after our colleagues as a responsible employer, to serve our customers as a retailer of essential goods, and to protect our business for the long term. We remain proud of, and humbled by, the response of our teams to the current challenges,” said Garnier.
“Looking forward, while the near term outlook is uncertain, the longer term opportunity for Kingfisher is significant. There is a lot more to do, but the new team and new plan is now established in the business and we are committed to returning Kingfisher to growth.”