Kingfisher has been a winner from the coronavirus crisis
Kingfisher, the DIY chain, has raised its interim dividend by nearly 40% and is set to buy back £300m of its shares as its profits rose throughout the pandemic.
The British company has been successful on the back of the coronavirus crisis as the lockdowns, in addition to the move to people working from home, led to people spending more doing up their homes and gardens.
While this trend is expected to somewhat reverse as the economy reopens, Kingfisher is expecting its sales in H2 are expected to fall by less than initially expected.
The company is predicting its fall-year sales will fall by at most 7% compared to a previous forecast of between 5% and 15%.
Kingfisher added that adjusted pre-tax profit for the year would be between £910m and £950m, compared to analysts’ forecasts of around £912m.
Ross Hindle, retail sector Analyst at Third Bridge, commented on Kingfisher’s results:
“Kingfisher experienced strong sales growth yet again, with H2 LFL sales up 22.8% y/y driven by a strong demand for home improvement across both retail and trade channels. What is further-more impressive is that both transaction volume and average basket size is up on a 1-year and 2-year basis,” said Hindle.
“Before Covid-19 double-digit growth in the DIY space was something of an anomaly, however a few months on and growth remains stronger than ever.”
“Lockdowns were a boon for the group but with online sales still low it looks like more needs to be invested into digital and data,” Hindle added.
“A structural change towards working-from-home have made people look at their homes differently. Many families have spent months redirecting money into home improvements, especially home offices, outdoor spaces, and garden sheds.”
The Kingfisher share price is down by 4.75% on Tuesday morning.
