- Kingfisher’s turnover rose just 0.3% at constant currency levels to £3.3bn
- In the UK and Ireland, the Screwfix owner’s revenue grew 2.7% to £1.63bn.
Kingfisher reported stagnant first-quarter sales as customers cut back on purchases of big-ticket items, and the home improvement sector proved slow to recover.
Screwfix’s parent company reported that turnover rose just 0.3 per cent at constant currency levels to £3.3bn in the three months to April and fell 0.9 per cent at constant currency levels. comparable.
Demand benefited from strong sales of core products, which account for two-thirds of Kingfisher’s total business, and increasing orders for seasonal products despite wet April weather.
Stagnation: Screwfix parent company Kingfisher reported that turnover rose just 0.3 per cent at constant currency levels to £3.3bn in the three months to the end of April.
In the UK and Ireland, the company’s revenue grew 2.7 per cent to £1.63bn, mainly due to gains in market share and trade customers in its Screwfix business.
However, like-for-like sales of major categories including kitchen, bathroom and storage products fell 6.3 percent following poor results from French brand Castorama and B&Q in the UK and Ireland.
Over the past two years, interest rate rises in the UK and Europe have made mortgages more expensive, suppressing the appetite for property renovations.
This came after a pandemic-induced boom in activity, caused in part by the rise in people working remotely and tough restrictions on socializing with people from other households.
Covid-19 also encouraged many Britons to leave big cities like London in search of more spacious properties, further spurring interest in home renovations.
Kingfisher’s annual revenue rose by around £1.7bn to £13.2bn between 2020 and 2022, but has since fallen amid elevated inflationary pressures.
In the most recent financial year, its turnover fell 1.8 per cent to £13bn, while profits fell 26.7 per cent to £345m.
Thierry Garnier, chief executive of Kingfisher, said the company was cautious about the market outlook for 2024 due to the “lag between housing demand and home improvement demand”.
As a result, Kingfisher has kept its full-year guidance the same, with adjusted pre-tax profits of around £490m to £550m and expected free cash flow of £350m to £410m.
However, the property renovation sector could receive a significant boost if central banks decide to cut interest rates later this year, as many analysts expect.
eToro analyst Adam Vettese said: “As the macroeconomic situation begins to improve… conditions should begin to improve for retailers like Kingfisher as a home improvement budget is back on the table for many households. “.
kingfisher actions They fell 0.95 per cent to 261.6p on Tuesday morning and have risen around 9 per cent since the start of the year.
