'New generation of DIY-ers' boosts B&Q sales
The rise of shed offices and "a new generation of DIY'ers" that has emerged during the COVID-19 pandemic has boosted B&Q.
Shares in B&Q-owner Kingfisher (KGF.L) jumped on Monday after the company reported strong sales and said it was confident recent momentum would continue.
Kingfisher, which also owns Screwfix and other home improvement brands in Europe, said sales rose by 7.2% last year to reach £12.3bn ($17bn). Gross profit rose 7.5% to £4.5bn in the 12 months to 31 January 2021. Pre-tax profit improved a huge 634% to £756m.
"The home-working revolution has been a rocket boost to demand as people were forced to find new ways of using space and re-refreshing rooms became almost like a national past time, with a new generation of DIY enthusiasts getting stuck in," said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.
Kingfisher saw growth across all markets and brands last year despite COVID-19 driven shutdowns. The company launched a restructure in June and invested in online sales to compensate for store closures. E-commerce grew by 158% to reach 18% of sales.
The company enjoyed a bumper end to the year as restrictions eased. Sales rose 15.5% in the fourth quarter.
Kingfisher reinstated its dividend, with a total payment of 8.25p per share for the year.
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"Kingfisher is coming out of the COVID crisis as a stronger business, with an improved competitive position in all key markets, strong new customer growth and a step change in digital adoption," chief executive Thierry Garnier said.
"The COVID crisis has established new longer-term trends that are clearly supportive for our industry - including more working from home, the renewed importance of the home as a 'hub', and the development of a new generation of DIY'ers - and we expect these to endure."
Garnier said recent trading was "positive" and said Kingfisher was "confident of continued outperformance" despite ongoing uncertainty. Kingfisher forecast "low double digit" sales growth in the first half of 2021, followed by declining sales as the business faces tough comparable numbers later this year.
"Kingfisher’s recent announcement about the expansion of Screwfix is a good indication of the expectation the company has about future sales," Streeter said.
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"The chain is planning on opening another 50 stores in the UK and Ireland, focusing on opportunities in inner cities and rural areas."
Shares jumped as much as 4% in London.
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