12th Jan 2021 08:12
(Alliance News) - Kingfisher PLC on Tuesday said it expects its annual profit to be at the top end of market estimates as the B&Q and Screwfix DIY chains owner has continued to see "strong" demand so far in its fourth quarter.
In the 10 weeks to January 9, group like-for-like sales jumped 17% year-on-year, helped by e-commerce sales more than doubling. Kingfisher added that its year-to-date like-for-like sales are up 6.5%.
Kingfisher said it is confident its annual adjusted pretax profit can land in the top end of the GBP667 million to GBP742 million analyst expectations range.
For the year ended January 31, 2020, Kingfisher reported adjusted pretax profit of GBP544 million, so financial 2021 could see a jump of up to 36%.
DIY store owners such as Kingfisher, which in mainland Europe also owns Castorama France and Brico Depot, have benefited from boosted demand for home improvement as locked down consumers spend more time indoors.
In November, Kingfisher's like-for-like growth was 11% but this doubled to 22% in December.
"The UK & Ireland continued to perform strongly in December, with growth at Screwfix accelerating from November," Kingfisher said, adding that Screwfix alone is on track to reach GBP2 billion of sales in financial 2021.
In France, like-for-like sales actually slipped 0.1% in November, before recovering with a 21% surge in December. The November fall was due to a "negative calendar effect year-on-year" as well as more stringent Covid-19 restrictions.
Brico Depot in Spain and Portugal, together making Kingfisher's Iberia arm, had a 6.3% November like-for-like fall, followed by a 21% surge a month late. Poland registered growth of 0.2% in November and 9.7% in December.
Finally, Romania had a 17% annual like-for-like climb in November, before a 13% rise in December.
"While the strength of our fourth quarter trading, to date, is reassuring, uncertainty over COVID-19 and the impact of lockdown restrictions in most of our markets continue to limit our visibility. Longer term, we are confident that the strategic and operational actions we are taking are building a strong foundation for sustainable long-term growth. We also believe that the renewed focus on homes is supportive for our markets," Chief Executive Thierry Garnier said.
All of the company's roughly 1,380 stores are offering 'click and collect' services, taking advantage of having "essential" retailer status.
Looking to its annual results, Kingfisher expects to report GBP45 million in virus-related costs but its adjusted pretax profit figure will also include GBP85 million in "non-recurring cost savings".
It has made no new claims under furlough programmes in the UK and back in December said it will return in full the UK and Republic of Ireland business rates relief that it received.
Its total annual business rates bill eligible for this relief is around GBP130 million, of which GBP110 million falls in the 2021 financial year and the remainder in the 2022 financial year.
Shares in the company were 2.6% higher at 286.62 pence each in early dealings on Tuesday in London, the best performer in the FTSE 100.
By Eric Cunha; [email protected]
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