B&Q owner brushes of Brexit as sales and profits rise
Brits have not downed tools in the wake of the Brexit vote, the owner of B&Q said today as it revealed growth in both sales and profit in its first half.
In the UK and Ireland, Kingfisher saw same-store sales rise 6.7% thanks to a “broadly supportive backdrop” and a sales surge at its Screwfix chain. B&Q sales were up 4.6% — excluding the impact of store closures.
“After the outcome of the EU referendum result in the UK, there has been no clear evidence of an impact on demand so far on our businesses,” the company said.
Boss Véronique Laury added that a five-year transformation plan unveiled in January, which involves an IT overhaul, shrinking its supplier base and cost cuts, would enable Kingfisher to ride out any potential Brexit-related storms.
“[A change] in the way we source might help us to absorb an impact if there is one. Whatever happens, it will be manageable.”
Laury also said she remained “optimistic” about future trade agreements and that the issue around free movement of people was “very limited”, with only 5% of Kingfisher’s UK employees coming from the EU.
The pound’s plummet since the June referendum has so far boosted profits by £17 million, though finance chief Karen Witts said pressure from currency swings should increase next year. Kingfisher buys between 15% and 20% of its goods in dollars.
Overall, Kingfisher’s sales rose 2.7% to £5.7 billion in the six months to July 31, and underlying pre-tax profit, which excludes the transformation plan costs, leapt 13.5% to £436 million. Shares jumped 7.4p to 384.10p.
However, in France, where it owns Castorama and Brico Dépôt, sales were dented by strikes and freak wet weather. Laury said the French business was “very volatile” because of weak consumer confidence and uncertainty surrounding elections in 2017.
