July 22, 2020 / 9:15 AM / 21 days ago

Britain's Kingfisher buoyed by lockdown DIY sales boom

LONDON (Reuters) - Home improvement retailer Kingfisher (KGF.L) forecast first-half underlying profit ahead of last year after exceptionally strong demand for DIY and gardening products during coronavirus lockdowns drove a 21.6% jump in second-quarter same-store sales.

Shares in the group, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, rose as much as 12.5% after it reported particularly stellar sales of plants, compost, decking, paint, wallpaper and tools.

Consumers, with more time on their hands during the pandemic as they work from home, have been tackling more do-it-yourself (DIY) projects, the retailer said.

Kingfisher closed its stores during COVID-19 lockdowns across Europe but they gradually re-opened from mid-April.

The group has particularly benefited from bumper online sales, which soared 225.2% in June year-on-year. Its second quarter ends July 31.

Kingfisher made use of the UK government’s job retention scheme, furloughing about 16,000 workers for several weeks.

Given its robust current trading, it was asked if it would return any cash received from the government.

“Since July 1, we have not claimed under any furlough programme across the group - including for high-risk and vulnerable people that can’t work,” said a spokesman.

“While our recent trading has been strong, our visibility as to trends in the second half of this year is low given uncertainty over a Covid-19 resurgence and the wider economic outlook. As a result, we are keeping this under review.”

The spokesman added that Kingfisher does not for now intend to apply for the additional furlough bonus announced by the government earlier this month.

Kingfisher’s same-store sales in its 2020-21 year so far to July 18 were down 3.7%, reflecting the store closures in its first quarter.

Given uncertainty over the virus it did not provide financial guidance for the full year.

It said its first-half profit performance had also benefited from cost reductions and would provide a more detailed update when it publishes interim results on Sept. 22.

Last year Kingfisher made first half underlying pretax profit of 353 million pounds, ($449 million), down 6.4%.

Reporting by James Davey; editing by Sarah Young and Emelia Sithole-Matarise

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