Kingfisher unveils another $ 300 million share buyback scheme as trade remains “sustainable” despite slowdown

  • Kingfisher LFL online sales in the first quarter grew 164% since 2019
  • Over the past two years, the DIY industry has benefited from business growth
  • Temporary festivals of stamp duty in the UK also stimulated demand for handicrafts

The owner of Screwfix Kingfisher will soon begin a redemption of another £ 300 million of his shares less than a month after the completion of the redemption program of the same size.

FTSE 100, a housing improvement company, completed a separate share repurchase scheme worth £ 300 million in late April when it returned £ 75 million of surplus capital to shareholders.

Over the past two years, the DIY industry has benefited from business growth as people have spent more time at home and amassed additional savings when restrictions on blocking have remained tight.

New scheme: Screwfix owner Kingfisher just completed a separate £ 300m share buyback scheme in late April when he returned £ 75m of surplus capital to shareholders

Demand has been boosted by the growing desire of Britons to live in more spacious accommodation and temporary vacations introduced by the UK government in the summer of 2020.

As a result, Kingfisher’s total revenue for the three months to the end of April was up 16.2% over the same period three years ago and amounted to £ 3.2 billion.

In all territories and brands of the company there is a great growth of business, but online sales increased especially sharply by 164 percent.

However, trading began to decline as Covid-19 restrictions were eased, leading to Kingfisher’s share price falling more than a third in the last 12 months, though Kingfisher shares closed 2.2 percent to 252.2 pensions on Monday.

The London-based group, which also owns B&Q and French chain DIY Castorama, said today that its total sales were down 5.8 per cent from the same period last year.

In the UK, Kingfisher’s largest market, revenue fell 14.2 percent after a two-thirds increase in 2021, with B&Q sales falling 17.8 percent to just under £ 1 billion and Screwfix sales falling 7 percent. 1 per cent to £ 5 million.

Weaker trade: B&Q earnings fell 17.8 percent to just under £ 1 billion in the first quarter after strong previous comparable figures last year

Weaker trade: B&Q earnings fell 17.8 percent to just under £ 1 billion in the first quarter after strong previous comparable figures last year

Outside the UK and Ireland, sales at Brico Depot in France fell 9.3 per cent after doubling the previous year, while demand in the Iberian and Romanian markets also declined.

However, revenues in Poland have more than halved due to increased purchases of goods in weather-related categories, expanding market share and unaffected stores.

CEO Thierry Garnier said: “Although we faced very strong benchmarks in the previous year, our continued strategic progress has allowed us to maintain a significant share of increased sales during the pandemic.”

Since the beginning of the current quarter, Kingfisher said revenue was up 21.8 percent on a par with Covid as trade “remained steady” and in line with forecasts for all brands and segments.

As a result, it still expects to publish around £ 770 million of adjusted pre-tax profit this fiscal year, down significantly from the previous 12 months but more than it earned before the pandemic.

The company acknowledged the increased economic and political uncertainty that had arisen since the beginning of the year, but argued that it was “effectively” managing cost growth and supply chain problems, and product availability was approaching Covid’s volumes.

AJ Bell Investment Director Ras Mold said: “B&Q owner Kingfisher has always had a hard time asking to meet the emergency period of 2021, when it was one of the few stores that could operate and people’s desire to renovate homes stuck during the blockade reached its zenith.

“Sales are proving to be more sustainable than some might have feared. This suggests that there is still some delayed demand for home improvement, despite pressure on household budgets.

“While inflationary pressures are a problem that companies have to contend with, it seems that the supply chain problems that have plagued the DIY sector, like many others, are at least beginning to ease.”

Recession: As the restrictions on the Covid-19 pandemic ease, Kingfisher's stock price began to decline, falling more than a third last year

Recession: As the restrictions on the Covid-19 pandemic ease, Kingfisher’s stock price began to decline, falling more than a third last year

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