Home improvement giant Kingfisher has significantly boosted its financial outlook, driven by robust trading across its UK brands, B&Q and Screwfix.
The retail group highlighted particularly strong sales at B&Q over the past six months, attributing this success to the market impact of Homebase store closures following its rival’s administration, alongside favourable weather conditions.
This strong performance has propelled the company to anticipate profits reaching the “upper end” of its current targets.
Kingfisher informed shareholders on Tuesday that pre-tax profits for the half-year ending July 31 climbed by 4.1 per cent to £338 million compared to the previous year.
The London-listed firm now expects to achieve an adjusted profit at the higher end of its £480 million to £540 million guidance for the current financial year.
Furthermore, the company has revised its cash flow projections upwards, now forecasting between £480 million and £520 million, an increase from its earlier guidance of £420 million to £480 million.
The improved targets came on the back of stronger sales across the group’s brands, particularly in the UK.
Total group sales grew by 0.8 per cent to £6.81 billion for the six months, with like-for-like sales rising by 1.9 per cent.
Like-for-like sales were up 3.9 per cent in the UK, driven by growth of 4.4 per cent in B&Q and 3 per cent in Screwfix across the half-year.
There was increased demand for paint, with sales of coloured emulsion up 10 per cent at B&Q, alongside a further recovery in demand for big-ticket items.
This was driven by “demand for new kitchen ranges” and bathroom and storage products.
It represents a continued recovery in demand for larger products after it had cooled in the face of the surging cost of living.
Kingfisher also told investors that its UK stores were boosted by “transference from the closure of Homebase stores”.
Major B&Q rival Homebase shut more than 50 stores by March of this year after tumbling into administration late in 2024.
Thierry Garnier, chief executive officer of Kingfisher, said the company saw a “good transfer” of former Homebase customers to its B&Q stores and cheered the opening of eight former Homebase shops as new B&Q sites.
He said the stores, which included five in the UK and three in Ireland, have performed strongly after a quick turnaround to reopen during the peak trading season.
The company said it has also worked to offset significant cost pressures this year, with around £145 million of headwinds linked to higher National Insurance contributions, wage inflation, new UK packaging taxes and increased social taxes in France.
In the UK, earlier this month B&Q confirmed plans to cut around 650 jobs in a management shake-up amid efforts to streamline its operations but bosses stressed this was not linked to increases in National Insurance.
Mr Garnier added: “We delivered a strong first half with high quality underlying like-for-like sales growth of 1.9 per cent, driven by increased volumes and transactions.
“We were encouraged by underlying quarter-on-quarter growth in our core categories, and a third consecutive quarter of growth in big ticket sales.
“Our expectations for our markets for the year remain consistent with what we outlined in March, whilst mindful of mixed consumer sentiment and political uncertainty.
“Combined with our first-half performance, this gives us the confidence to upgrade our full-year profit and free cash flow guidance and to accelerate our share buyback programme.”
