B&Q owner cashes in on lockdown DIY boom as profits leap more than 600%

The owner of B&Q has cashed in on a DIY boom as millions of people stuck at home tried to improve their living conditions.

Monday, 22nd March 2021, 8:55 am
Updated Monday, 22nd March 2021, 8:55 am
Shoppers returned to B&Q stores in Scotland during the summer following the initial lockdown as stores were classified as essential. Picture: Lisa Ferguson

Kingfisher said it had seen pre-tax profits leap 634 per cent from £103 million to £756m in the 12 months to the end of January.

Sales increased by 7.2 per cent during the same period to £12.3 billion, the company revealed. Growth was driven by a boom in online sales, which were up by 158 per cent.

E-commerce was already a growing segment for the business, which also owns Screwfix, as it rose 8 per cent in the year ending January 2020. However, the explosive growth during lockdown came as people tried to do up the homes they were confined to.

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Chief executive Thierry Garnier said: “Kingfisher is coming out of the Covid crisis as a stronger business, with an improved competitive position in all key markets, strong new customer growth and a step change in digital adoption.

“I would like to express my personal thanks to all our teams for their incredible efforts in the most testing of circumstances.”

The company said it had seen a strong start to this financial year amid high demand in the UK and France, which are both going through lockdowns.

Since the end of January life-for-like sales have risen more than 24 per cent compared with the same period in 2020.

Garnier added: “Current trading remains positive and, while visibility is limited for the year as a whole, we are confident of continued outperformance of our wider markets.

“The Covid crisis has established new longer-term trends that are clearly supportive for our industry - including more working from home, the renewed importance of the home as a ‘hub’, and the development of a new generation of DIYers - and we expect these to endure.

“With our strategic progress, we are well positioned to capitalise on these new and positive market trends.”

Richard Hunter, head of markets at Interactive Investor, said: “Big tech stocks in the US may have grabbed the headlines as the pandemic winners, but they are not alone. For Kingfisher, the year has provided a perfect storm.

“The DIY boom, which ranged from large home improvement spends to adjusting areas for working from home, could hardly have played more thoroughly into Kingfisher’s hands.

“Kingfisher has clearly made hay while the sun shines, but in some ways the hard work is only just beginning. The clear initial tailwinds from the pandemic are unlikely to be repeated with the initial surge of demand now over.

“From a structural perspective, it remains to be seen whether the likely return to the office will halt such strong growth, or whether the fact that home working will still remain to some extent provides future opportunities.”

Adam Vettese, an analyst at investment platform eToro, noted: “Europe’s rekindled love for DIY shows no sign of abating, with Kingfisher posting yet another strong set of results.

“It’s rare these days to see a company in such a strong position financially and it’s clear the B&Q owner has benefited greatly from people being forced to stay home.”

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Watch: Long queues outside B&Q as stores start to reopen across Scotland

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