Profits plunge by almost a third at Screwfix owner

Profits have slipped at Screwfix owner Kingfisher over the last six months as a result of poor sales on the continent.

Profit before tax was down 28.8 per cent to £336m over the last six months, with UK & Ireland and France slightly ahead of expectations.

This was more than offset by a lower than expected Poland performance. Statutory profit before tax was down 33.1 per cent to £317m.

As a result full year guidance has been downgraded reflecting the results for the first half and the trading environment in global markets.

The owner of Screwfix which is headquartered in Somerset, has updated its full year profit before tax guidance from £634m to £590.

Thierry Garnier, chief executive, said: “Our LFL sales in H1 were slightly ahead of expectations, against a backdrop of unseasonal weather and ongoing macroeconomic challenges in our markets.

“We saw good growth in our UK banners, with Screwfix gaining significant market share. At the same time, we faced strong comparatives and a weaker trading environment in Poland, while consumer confidence in France is at a 10-year low. Overall, demand for our core and ‘big-ticket’ categories was healthy, and we were pleased to see an improving volume trend in these categories through the half.

“We continue to make strong progress against our strategic priorities. E-commerce sales were up 7% in H1, supported by the continued success of our online marketplaces. B&Q’s marketplace sales reached 33% of its e-commerce business in July.

“We leveraged our data science capabilities to develop AI-powered solutions such as our markdown tool, which in early pilots at B&Q delivered a very encouraging margin improvement on clearance products. We also advanced our retail media plans through new partnerships to accelerate advertising income. And we continued to invest in dedicated ranges, tailored services and expert colleagues to better serve trade customers across all our banners, including launching ‘Pro’ zones in 27 stores in France and Poland.

“Further, with nine Screwfix stores now open in France including four new stores in H1, customer momentum is building. We are now planning for up to 20 store openings this year. These early results in France have encouraged us to take the next step in our international expansion journey, and we are today announcing the launch of Screwfix in Q3 as a pure-play online retailer in up to 20 European countries.

“Trading in the UK & Ireland continues to have positive momentum. However, to better reflect our performance in H1 and the trading environment in our markets, we have updated our profit guidance for this year and are proactively managing our operating costs accordingly. We remain very positive on the medium-to-long term outlook for home improvement growth in our markets, and confident in our ability to grow market share and deliver on our medium-term financial objectives. Underscoring this confidence, we are today announcing a new £300m share buyback programme, starting in early October.”