DIYWEEK.net

B&Q and Screwfix's parent company Kingfisher has seen total sales rise 8.4% in the three months to July 31, with like-for-likes in Britain and Ireland up 7.2%.
B&Q saw LfL sales increase by 5.6% and total sales up 0.3% despite several store closures. Screwfix continued its long run as UK star performer, with sales up 24.5%, a LfL increase of 13.3%.

Stores that had been open over a year saw an increase of 3% in sales.

The news wasn't quite so positive across the channel, with underlying sales in France falling 3.2% - a drop Kingfisher bosses blamed on widespread industrial action and exceptionally wet weather. Poland, however, saw like-for-likes up 7.3%.

In comes following Kingfisher ceo Veronique Laury's announcement back in January of a strategy to boost Kingfisher's annual profit by £500m from 2021. This plan, which will cost £800m to deliver, involves unifying the product offer across the business, as well as improving ecommerce capabilities. Shareholders are also expected to receive £600m over the next three years through share buybacks. So far £150m has been returned.

Kingfisher has predicted a profit of £692m for its 2016/17 annual results.

Said Veronique Laury: "We have delivered another solid sales performance in Q2 driven by the UK and Poland. In the UK, the EU referendum result has created uncertainty for the economic outlook, although there has been no clear evidence of an impact on demand so far on our businesses. In France, widespread industrial action and exceptionally wet weather created a more challenging environment, after a more encouraging Q1. We remain cautious on the short-term outlook.

"In the meantime, we continue to focus on our ONE Kingfisher plan, based on always putting customer needs first. We look forward to updating you on our early progress at our half year results next month."

XTB market analyst David Cheetham interpreted the results as follows: "The latest trading update for Kingfisher shows a 3% rise in like for like sales for their fiscal second quarter, and despite some underperformance in their French outlets is overall a robust report.

"The retail giants flagship store has been the stand out performer, with B&Q reporting a like for like sales increase of 5.6% on a constant currency basis. Despite generating approximately a third of the turnover as its larger counterpart the growth of 13.3% in the same metric for Screwfix is impressive.

"Overall investors will likely view this report as favourable, with the announcement of £150m of share buybacks so far this year indicating that the firm believe their stock is undervalued. CEO Veronique Laury acknowledges in her comments that the EU referendum has created uncertainty for the economic outlook, but shareholders will be pleased to hear that so far there is no clear evidence of an impact on demand for the business."