DIYWEEK.net

The heatwave in recent months gave Kingfisher's businesses the boost it needed after a difficult first quarter and resulted in a fairly flat performance across the board.
Sales for the firm, which operates B&Q and Screwfix in the UK and Ireland, were up 1.5% for the first half ended August 3, with retail profit down 1.8%.

Volatility was a key feature throughout H1, said the company, with record cold weather in Q1 resulting in a 10% drop in product sales and retail profit decline of -29.2%, only to be spectacularly boosted by the warmer weather in Q2, which resulted in a 9% uplift in product sales and 10.8% jump in retail profit.

In the UK Screwfix reported a 14.6% rise in sales for the first half, up 3.6% on a like-for-like (LFL) basis. B&Q, meanwhile, was impacted more severely by the weather patterns and sales dropped 1.8% in H1, as outdoor products took a hit in Q1, and were down 1.7% LFL. Due to the nature of B&Q's business, unlike Screwfix, a high proportion of its sales come from outdoor products and seasonal items during this trading period. The unseasonably cold weather in Q1 saw outdoor product sales fall 11%. An uplift of 17% in Q2, as the weather improved, served to provide a fairly flat result for the half as a whole.

Sales performance was also enhanced by its international businesses, with the biggest lift coming from a relatively young market in Russia, where Kingfisher operates 19 Castorama stores. Total sales grew 12.4%, up 10.5% on a LFL basis for the half. France, where the retail group operates 105 Castorama storres and 106 Brico Depot outlets and hs 25% market share, gave a similar performance to the UK, with flat sales across the half, down 2.4% LFL.

Kingfisher continues with the expansion of Screwfix, opening its 300th store next month. The trade focused DIY chain previously announced plans to open 60 stores this financial year and Screwfix chief executive Andrew Livingston told DIY Week last month that he sees potential for a total of around 425 trade counters in the UK.

There are also plans underway to take the Screwfix brand to other parts of the world, with an initial trial of four stores in Germany, set to open next summer.

Kingfisher grup chief executive Ian Cheshire said: "After a difficult first quarter, in which sales and profits were affected by record bad weather, we were able to capitalise on the better weather in the second quarter particularly in the UK, to grow quarterly profits and so deliver a broadly flat result across the half.

He added: "However, underlying consumer confidence remains weak in our major markets, so we continue to focus hard on our self-help initiatives to drive growth, margin and cost efficiencies."

A recent move to improve cost efficiencies across B&Q saw the DIy giant restructure its store management teams, merging two existing job roles into one new deputy manager position, which resulted in the firm making 180 redundancies last month.

Abroad, Kingfisher is continuing to build on successes and has acquired 15 Bricostore outlets in Romania, with plans to move its Brico Dépôt chain into the country. The company's Koçtaş business is also in negotiations in Turkey over acquiring two large ex-Praktiker stores.

Mr Cheshire continued: "Looking ahead, we remain ready to capitalise on any improvement in conditions or opportunities as they arise, including the potential pick up in the UK housing market. In the meantime, our self-help plan, 'Creating the Leader', continues to progress well, including the acquisition of 15 stores in Romania, our first new country entry in seven years... Overall, we remain confident in our future prospects."