Kingfisher dismisses Brexit impact as first half profits beat expectations

Home improvement retailer Kingfisher posted better-than-expected results in the first half of its financial year and confirmed its turnaround plans remained on track. In the six months to the end of July, the FTSE 100-listed group recorded a 13.5% year-on-year increase in underlying profit before tax to £436m ($568.6m), beating analyst's expectations for a £430m figure.

Kingfisher, Europe's largest company in the sector, said added total sales on a constant currency basis were 2.7% higher than in the corresponding period in the previous year at £5.75bn, on the back of strong performances in Poland and in the UK.

The group also benefited from £17m of favourable currency movements on the translation of non-sterling retail profits.

The group, which owns British chains Screwfix and B&Q, also dismissed fears surrounding Britain's European Union referendum, but warned the outlook in France remained delicately balanced.

"In the UK, the EU referendum has created uncertainty for the economic outlook, even though there has been no clear evidence of an impact on demand so far on our businesses. In France we remain cautious on the short-term outlook," said group chief executive Véronique Laury.

Over the six-month period, total sales at B&Q declined 2% year-on-year due to store closures, although that was offset by a 24% growth at Screwfix, which meant the UK & Ireland enjoyed a recorded 3.1% growth on a constant currency basis, or 6.7% on a like-for-like basis, while retail profits were up 8.8%.

In January this year, Laury launched a turnaround plan aimed at boosting the company's annual profit by £500m per year from 2021. On Tuesday (20 September), she said the strategy, which will cost £800m over the next five years, was on track as was the company's plan to return capital to shareholders over the next three years through share buybacks.

Kingfisher, whose shares have risen 14% so far this year, has so far returned £160m to its stakeholders of the total £600m it intends to give back.

"We are starting to build solid foundations to enable us to deliver our five year transformation, which is our key growth driver," Laury said.

"We are making good progress on our strategic milestones for this first year and we are on track. The level of transformation activity will increase significantly, however given the expertise and energy of our colleagues we continue to feel confident about the challenges ahead."