Kingfisher Lifts Profit Guide as Screwfix Outperforms B&Q
Kingfisher raised full-year profit guidance to £635m after Screwfix growth offset B&Q weakness, driving a 10% share price jump.
Key points
- Kingfisher adjusted pre-tax profit rose 9.9% to £404m in the first half.
- Screwfix like-for-like sales grew 5.6% while B&Q sales fell 2.9%.
- Full-year profit guidance was raised to £595m-£635m from £565m-£625m.
Kingfisher shares climbed approximately 10% on Tuesday morning following the release of half-year results that showed adjusted pre-tax profit rising 9.9% to £404m. The positive market reaction occurred despite a challenging consumer environment, as the group successfully leveraged strong performance in its trade-focused segment to counteract declines in its traditional retail division.
The financial update highlighted a sharp divergence within the retailer’s portfolio. While the broader market struggled, Kingfisher’s strategic pivot toward professional customers proved effective, allowing the company to maintain overall profitability and subsequently upgrade its expectations for the remainder of the fiscal year.
Screwfix drives group profitability
Screwfix, the trade and online tools business, recorded like-for-like sales growth of 5.6%, serving as the primary engine for the group’s earnings. This robust performance masked significant headwinds at B&Q, where like-for-like sales fell by 2.9%. Consequently, the overall group like-for-like growth rate remained negligible at just 0.1%, indicating that the high-margin trade segment was critical in stabilizing the bottom line.
Full-year guidance upgraded
Based on this resilient half-year performance, management increased its full-year adjusted pre-tax profit guidance to a range of £595m-£635m, up from the previous outlook of £565m-£625m. Free cash flow guidance was also lifted to £480m-£520m, compared to the earlier estimate of £450m-£510m. CEO Thierry Garnier cited consistent delivery and strategic progress as the basis for this confidence, noting that opportunities ahead support the upgraded trajectory despite the mixed consumer climate.
Share buyback and earnings details
Adjusted earnings per share rose 16.1% to 17.8p, although free cash flow decreased by 29.1% to £339m. The interim dividend remained unchanged at 3.8p. In a further signal of capital allocation, Kingfisher confirmed a third tranche of up to £50m for its ongoing £300m buyback programme, with £125m of the total already completed. According to AskTraders, these figures underscore the company’s focus on returning capital to shareholders while navigating a difficult retail landscape.
