UK's Kingfisher expects DIY boosting trends of COVID to endure

James Davey
·2-min read

By James Davey

LONDON (Reuters) - British home improvement retailer Kingfisher said it expected the supportive industry trends established by the COVID-19 pandemic to endure as it reported a 44% jump in full year profit and a strong start to its new financial year.

Thierry Garnier, CEO of the group that owns B&Q and Screwfix in the UK and Castorama and Brico Depot in France and other markets, said it would benefit from more people choosing to work from home even as the crisis recedes.

"There is no doubt that the trend of flexible working arrangements has accelerated forward many years," he told reporters on Monday.

"Over time these factors will lead to material changes such as more wear and tear on the home and the need to organise living space differently thereby creating a structurally supportive shift for home improvement."

Garnier also said the crisis had seen the emergence of a new generation of DIY'ers.

He highlighted that 18-to-34 year olds had done more home improvement than any other age group, with 20% doing do-it-yourself for the first time.

"All of this is very encouraging for the future of our industry," he said.

Kingfisher reported an adjusted pretax profit for the year to Jan. 31 of 786 million pounds ($1.1 billion) - ahead of analysts' average forecast of 757 million pounds and the 544 million pounds made in 2019-20.

Its shares were up 4.4% at 0912 GMT, extending year-on-year gains to 159% and valuing the business at 6.9 billion pounds.

Sales rose 6.8% on a constant currency basis to 12.3 billion pounds, with like-for-like sales up 7.1% for the year and up 15.5% in the fourth quarter.

The pandemic has also boosted shopping online. Kingfisher highlighted e-commerce sales growth of 158% in the year.

Kingfisher's like-for-like sales have accelerated to be up 24.2% in the first quarter so far of its new financial year.

The group, which resumed dividend payments, is planning for low double-digit like-for-like sales growth in the first half of its 2021-22 year, but a dip in the second half of up to 15% due to tougher comparative numbers and uncertainty over the macroeconomic and consumer environment.

It is aiming to grow full-year adjusted pretax profit, before 85 million pounds of non-recurring net cost savings, in line with sales.

($1 = 0.7223 pounds)

(Reporting by James Davey; Editing by Edmund Blair and Kirsten Donovan)