Kingfisher Lifts H1 Profit to £404m, Raises Full-Year Outlook
Kingfisher raised its full-year profit guidance to £595m-£635m after H1 adjusted pre-tax profit rose 9.9% to £404m, driven by margin gains and cost savings.
Key points
- Kingfisher raised full-year adjusted pre-tax profit guidance to £595m-£635m after H1 profit rose 9.9% to £404m.
- Trade sales increased 16% excluding Screwfix, and marketplace GMV jumped 42%, contributing over £13m to retail profit.
- The company returned £333m to shareholders via dividends and buybacks, with net leverage standing at 1.4 times.
Kingfisher plc reported a 9.9% increase in adjusted first-half pre-tax profit to £404 million, prompting the retailer to upgrade its full-year financial outlook. The company lifted its expected adjusted pre-tax profit for the year to a range of £595 million to £635 million, a midpoint increase of £20 million, while raising free-cash-flow guidance to £480 million to £520 million. According to data highlighted by Yahoo Finance, these improvements were fueled by gross-margin gains and £44 million in structural cost savings, which offset £48 million in operating-cost inflation, including higher UK national insurance contributions.
The profit growth was supported by strong performance in trade and digital channels, despite mixed results across different geographic markets. Group trade sales reached £2.1 billion, rising 16% excluding Screwfix, with trade penetration increasing by more than three percentage points to 31% of total sales. E-commerce sales grew by 16%, and marketplace gross merchandise volume jumped 42%, contributing over £13 million to retail profit. CFO Bhavesh Mistry noted that free cash flow totaled £339 million after capital investments, while adjusted EBITDA stood at £784 million with net leverage at 1.4 times.
Cost discipline offsets operational inflation
Kingfisher generated £44 million in structural cost reductions through distribution-center space optimization, procurement efficiencies, and store operating-model improvements. These measures, combined with a £40 million contribution from gross-margin gains, allowed the company to absorb significant cost pressures. The margin improvements were driven by group buying, sourcing strategies, marketplace growth, and retail-media revenue. Mistry indicated that further opportunities exist in supply-chain optimization and productivity measures across central functions and stores.
Trade and digital channels drive growth
The trade segment emerged as a primary growth engine, with sales increasing 16% excluding Screwfix. The company reported that trade zones are now present in 49% of stores outside the Screwfix banner, and 438 trade sales partners have been enrolled across its brands. CEO Thierry Garnier stated that the strategy is gaining momentum, particularly in these specialized areas. While Screwfix led UK performance with 5.6% like-for-like sales growth, the broader group saw pressure in categories like bathrooms and at B&Q, which was offset by stronger results in Poland and Iberia.
Shareholder returns and capital allocation
Kingfisher returned £333 million to shareholders during the first half through dividends and share buybacks. The company declared an interim dividend of 3.8 pence per share, unchanged from the prior year, and expects to complete £175 million of its £300 million buyback program by the end of December. Capital expenditures totaled £171 million, funding nine new stores, technology upgrades, and new product ranges. The company aims to maintain this balance between investing in strategic priorities and returning capital to investors as it pursues its long-term resilience goals.
