Kingfisher shares increased 2.3% to 252p in early morning trading on Monday following a reported 16.2% growth in like-for-like sales compared to pre-Covid-19 levels in its Q1 2022 trading update.
The DIY group confirmed sales in line with executive expectations of £3.2 billion for the term, however, like-for-like sales fell 5.4% and total sales in constant currency dropped 4.2%.
Kingfisher highlighted resilient demand in its DIY and DIFM/trade sectors, and noted that it continued to manage inflationary pressures moving into Q2 2022-2023.
The home-improvement company added that omni-channel engagement remained at a high rate, with a three-year e-commerce sales increase of 164%, reflecting 16% of group sales compared to a 7% coverage year-on-year.
“Kingfisher has delivered a good first quarter of trading, with LFL sales 16.2% ahead of our pre-pandemic performance,” said Kingfisher CEO Thierry Garnier.
“While facing very strong comparatives in the prior year, our continued strategic progress has enabled us to retain a significant proportion of the increased sales during the pandemic.”
B&Q and Screwfix
However, Kingfisher said its B&Q sales slid 17.8% in total, and dropped 18.3% in like-for-like sales due to the impact of storms in February, with like-for-like sales in weather-related categories falling 28% against the same period last year.
The firm commented that its Screwfix brand sales fell 7% overall, and slid 10.9% on a like-for-like basis. However, Kingfisher drew attention to its 13 Screwfix store openings in Q1 over the UK and Ireland, with an extra 80 stores set to open across the countries for the remainder of the financial year, alongside the launch of its first Screwfix stores in France in HY2 2022-2023.
Meanwhile, the store franchise saw a 59% increase in its Poland sales, with a 54.5% rise on a like-for-like basis, with strong performance across all categories and the launch of one big-box store over the term.
“Looking forward, we are reiterating our profit guidance for FY 22/23. We are focused on delivering on our strategic objectives and growth initiatives, including the growth of our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, further increasing our trade customer base,” said Garnier.
FY 2022-2023
The firm reiterated its FY2022-2023 guidance with an estimated pre-tax profit of £770 million.
Kingfisher said it estimated broadly flat central costs year-on-year, alongside a capital expenditure gross capex target of 3.5% its total sales, which amounted to £397 million for FY 2021-2022.
The group confirmed that its priority remained top line growth and to target additional share gains in its market as it centred its focus on strategic objectives and investments for growth.
Kingfisher also noted a further £300 million of surplus capital through its share buyback programme after its closed £145 million shares repurchase in April, and confirmed the first tranche was scheduled to commence soon.
The company noted that its dividend policy target cover range was 2.25 to 2.75 times, based on adjusted basic earnings per share.