Kingfisher UK division performs well in Q1

Kingfisher has seen its sales in the UK and Ireland increase by 6.1% year-on-year in the three months to 30 April, reaching £1.73bn.

The DIY retailer, which owns brands including B&Q, Screwfix and Castorama, saw its sales across the group increase by 1.8% in the period to £3.3bn.

However, its French and Polish divisions saw sales drop by 4.9% and 0.4%, respectively. Kingfisher said the drop in French sales was a result of a modernisation plan and restructuring across its Castorama stores.

Despite this, its other international divisions saw a collective sales increase of 2.5% in the period.

Chief executive officer at Kingfisher, Thierry Garnier, said: "We have made a good start to the year with underlying sales growth of 3.1%, market share gains in all key regions and further progress in our strategic priorities.

"Our UK banners performed particularly well, driven by strong seasonal sales and growth in trade and e-commerce. We have successfully completed the conversion of eight former Homebase stores, all of which will be operating under the B&Q banner by the end of May. France delivered sequential improvement, outperforming challenging market conditions, while Poland, as expected, experienced short-term volatility due to geopolitical factors.

The Q1 results come after Kingfisher saw its profit before tax drop by 35.4% to £307m in the year to 31 January.

In its outlook for the rest of the year, the firm expects its profit before tax to reach between £480m and £540m, while its free cash flow is set to hit between £420m and £480m.

Kingfisher added that it remains confident about its medium and long-term prospects for the sector.

The announcement comes as the firm launched a new £300m share buyback programme.

Investment director at AJ Bell, Russ Mould, concluded: "Kingfisher got hammered for its last update and despite some bright spots in its latest release, it is apparent the business still needs some renovation.

"The company is sticking with guidance despite a better-than-expected showing from B&Q and other UK brands Screwfix and Tradepoint. This reflects the fact its French and Polish businesses are struggling. The latter partly as a result of a tricky geopolitical backdrop – with the country close to the frontline of one of the world’s key flashpoints thanks to its relative proximity to Russia.

"There may be some scepticism about how sustainable the performance in the UK can be too – as clearly some of it has been driven by the good weather during April and May. Given the big divergence in performance between the company’s UK business and its main overseas operations in France and Poland, questions may begin to surface about whether it might look to focus its attention on these shores and divest other parts of the group."



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