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The Markets
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Retail & consumer

Kingfisher PLC KGF View profile

Kingfisher lifts profit guidance as Screwfix drives half-year gains

The image features a female employee of B&Q in an orange apron organizing products on a shelf in a retail store. A male colleague can be seen in the background, also engaged in tas — Credit: Courtesy of Kingfisher
Courtesy of Kingfisher

Kingfisher, the FTSE 100 owner of B&Q and Screwfix, has raised its full-year profit forecast after a solid first half.

The DIY retailer now expects adjusted pre-tax profit of £595 million to £635 million, up from a previous range of £565 million to £625 million.

It also lifted free cash flow guidance to between £480 million and £520 million, from £450 million to £510 million.

The upgrade came as adjusted pre-tax profit rose 9.9% to £404 million in the six months to 31 July, helped by a wider gross margin, tight cost control and a one-off £14 million business rates refund in the UK.

Stripping out that refund, adjusted profit growth was a more modest 6.1%.

Statutory pre-tax profit climbed 18.4% to £400 million, flattered by the absence of a £31 million loss booked a year earlier on the sale of the group's Romanian business.

The standout performer was Screwfix, the trade-focused chain, where like-for-like sales jumped 5.6%.

Group underlying like-for-like sales edged up just 0.3%, a reminder that the wider consumer backdrop remains subdued.

Momentum in Kingfisher's growth priorities helped, with trade sales up 16% excluding Screwfix and e-commerce sales also 16% higher on the same basis.

Its online marketplace, where third parties sell through Kingfisher's sites, grew gross merchandise value 42% to £372 million and contributed £13.4 million of profit, up from £7 million a year earlier.

Gross margin widened by 70 basis points to 38.4%, while adjusted earnings per share rose 16.1% to 17.8p.

The interim dividend was held at 3.8p, and a £300 million share buyback continues, with a third £50 million tranche starting this week.

Chief executive Thierry Garnier said the company was building a "stronger, more resilient" business, though he acknowledged the consumer environment "remains mixed".

Kingfisher's upgrade follows similarly upbeat figures from smaller rival Wickes, which reported a week earlier.

Wickes lifted first-half revenue 2.1% to £865.3 million and remains on track for around 10% growth in full-year adjusted pre-tax profit, while nudging its interim dividend up 2.8% to 3.7p.

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