DIY group Kingfisher has unveiled strong sales growth in its Screwfix business in the third quarter, seen as an indication that tradesmen are keeping busy in the first full quarter after June’s Brexit vote.
The company, which operates more than 1,100 stores including its main B&Q brand, said total group sales rose 11.5 per cent to £3 billion in the period ending 31 October. However, the increase fell to 1.3 per cent stripping out the effect of the pound’s fall in value.
Kingfisher chief executive Véronique Laury said trading conditions in the quarter had been in line with the first half, hailing “another solid sales performance overall”.
She said that the performance had been driven by Poland and the UK, with sales in the former ahead 9.5 per cent on a constant currency basis, and up 2.5 per cent in the UK and Ireland at £1.24bn. However, Laury added that growth was offset by “softer” sales in France, where they fell 2.6 per cent to £1.15bn.
Sales jumped 23.1 per cent at Kingfisher’s Screwfix business, which the firm said came on the back of its digital capability, new and extended ranges, and 11 new outlets.
Laury was upbeat about the group outlook, saying that its five-year transformation programme remained on track. “In addition, we are gearing up for next year when the level of transformation activity will significantly increase,” the chief executive added.
Neil Wilson, markets analyst at ETX Capital, said: “The good news for UK plc is that the trade-focused Screwfix brand is delivering excellent sales growth and this suggests Britain’s plumbers, electricians and other trades are busy building in the first full quarter since the Brexit vote.
“As we head into the Autumn Statement — and lots of potential measures to boost building, infrastructure etc — this trend ought to continue.”
George Salmon, equity analyst at Hargreaves Lansdown, said that Kingfisher has “one foot on either side of the Channel”, noting the different performances in the quarter..
He also said there is little crossover in product range between the two geographies, meaning the group wasn’t maximising its scale. Kingfisher has said it is aiming for efficiencies to generate a £500 million yearly uplift to profits by 2021.
But Salmon said: “It won’t be plain sailing from here. Previous Kingfisher bosses have tried and failed with similar plans, and just now trading conditions look challenging.”