LONDON (ShareCast) - (Sharecast News) - DIY retail group Kingfisher pulled current year guidance but said second quarter like-for-like sales to June 13 rose 21.8% as coronavirus lockdowns were eased across Europe.
Sales trends improved sharply from the height of early lockdowns, with like-for-like sales swinging from a 74% slump in early April to a rise of more than 25% in the second week of May.

Kingfisher decided to stop in-store shipping in the UK and France in mid-to-late March but offered click and collect and home delivery services, leading to a sharp rise in online sales.

Sales growth in the first week of May was largely driven by exceptional demand at B&Q and Castorama Poland, Kingfisher said, adding that this continued into June, where it also saw "exceptional" demand in France following the end of the confinement period on 11 May.

Statutory pre-tax profit for the year to January 31 fell 65.7% to £103m after £441m of exceptional items, mainly due to £118m on store impairments due to reduced freehold valuations and £130m relating to the group's exit from Russia.



Adjusted full-year pre-tax profit fell 5.2% to £544m with total sales 1.5% lower to £11.5bn. Kingfisher said it had access to more than £3bn in cash, providing significant liquidity headroom.

It also unveiled a new 'Powered by Kingfisher' strategy to refine what it called an "overly complex" operating model.

"The Kingfisher Group took on too many responsibilities, the business became overly product-led instead of retail-led, and we tried to do too much with multiple large-scale initiatives running in parallel," the company said in a statement.

"Altogether, this resulted in a lack of agility in meeting customer needs ... and caused disruption to sales. Much of the financial benefit from leveraging Kingfisher's collective scale has been offset by additional costs, clearance, and logistics and stock inefficiencies."

"While some of our banners have delivered growth over the last four years (notably Screwfix and Poland), in other markets such as France, our performance has been disappointing. Group sales and retail profit need to improve."

Richard Hunter, head of markets at interactive investor said Kingfisher's apparent determination for change "is one which will be appreciated by investors, if long overdue".

"In an unusual set of circumstances, Kingfisher is to rejoin the FTSE100 this month having been relegated in March, despite the shares being down over 6% in the year to date and by 2% over the last year, as compared to a decline of 15% for the wider premier index," he said.

"This is due to the recovery of the shares since the mid-March lows, during which time the price has soared by 64%. The market consensus has also improved of late, with a move to hold from the previous sell rating perhaps reflective of brighter days to come."

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