B&Q and Screwfix owner Kingfisher has upgraded its full-year guidance after reporting a stronger-than-expected first half, with adjusted pre-tax profit rising 9.9% to £404m in the six months to 31 July.

Total sales increased 1.6% to £6.86bn, in line with expectations, while retail profit rose 8.2% to £489m. Underlying like-for-like sales increased 0.3%, with Screwfix again the standout performer, recording 5.6% growth and gaining market share.

Kingfisher said performance was supported by a 70 basis point improvement in gross margin to 38.4%, continued cost control and a £14m business rates refund. Trade sales excluding Screwfix increased 16%, while e-commerce sales grew 16% and marketplace gross merchandise value rose 42% to £372m, generating a £13.4m profit contribution.

The underlying performance was mixed across the group, however, with B&Q's second-quarter like-for-like sales falling 1.8%.

The group has raised its full-year adjusted pre-tax profit guidance to £595m-£635m, from £565m-£625m previously, while free cash flow guidance has increased to £480m-£520m from £450m-£510m. Kingfisher is also continuing its £300m share buyback, with £125m purchased to date, and declared an interim dividend of 3.8p.

Kingfisher shares rose around 10% in early trading to about 336p following the results, making the group one of the FTSE 100's strongest performers in the session.

CEO Thierry Garnier said: “We delivered a solid H1 performance, growing sales, gross margin and profits through market share gains and continued momentum across trade, e-commerce, marketplace and group sourcing. We are building a stronger, more resilient Kingfisher, with our strategic priorities creating new growth opportunities and strong financial discipline supporting performance across the business.”

AJ Bell investment director Russ Mould said Kingfisher's focus on trade sales was continuing to support performance, particularly through Screwfix, where customers tend to have more recurring demand for tools and materials, and among younger generations who are less confident taking on home improvement projects themselves.

"Kingfisher’s strategy of targeting trade sales continues to pay off in spades and supported an eye-catching increase in full-year guidance alongside strong first-half results," Mould said. “Despite the robust performance, there were indications of weaker consumer sentiment, with big-ticket items like bathrooms seeing an 8.1% fall in the second quarter."

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