B&Q owner Kingfisher scoops £1bn profit bonanza

The owner of B&Q, Kingfisher, has become only the third British retailer to make £1billion in annual profits.

The company, which also owns Screwfix, has joined the UK’s biggest grocer, Tesco, and high street stalwart Marks and Spencer in reaching the milestone.

Tesco first hit £1billion of annual profits in 2001, and has since beaten that mark at least 15 times, most recently in 2020.

Mr Fix-it: Kingfisher boss Thierry Garnier said the pandemic-fuelled DIY boom showed ‘no signs of slowing down’

And M&S has topped £1billion profit three times, doing so most recently in 2008.

Kingfisher’s achievement comes after a pandemic-fuelled DIY boom, which boss Thierry Garnier said showed ‘no signs of slowing down’.

It is the UK’s biggest DIY retailer, with 1,100 B&Q and Screwfix stores in the UK, employing 27,955 staff.

Sales in the year to January 31 hit a record high, climbing 6.8 per cent from a year earlier to £13.2billion.

Profit was 33 per cent higher at £1billion, with Garnier saying it was ‘the best set of results in our 40-year history’. He added: ‘We do not see a major slowdown.

‘We believe the underlying trends are very supportive.

‘In a crisis, DIY is a good place to be. When you want to save money, you do things yourself. We saw in the last crisis, DIY seems to be a fairly resilient industry.’

The UK and Ireland accounted for around 70 per cent of profits with France and Poland contributing most of the rest.

Kingfisher is the UK’s biggest DIY retailer, with 1,100 B&Q and Screwfix stores in the UK, employing 27,955 staff

But analysts and investors fear the DIY boom may fizzle out after pandemic restrictions were lifted and consumers tighten their belts amid soaring inflation.

Kingfisher shares fell 6.3 per cent, or 18.4p, to 272.9p.

It said sales have slipped and since February have been 8pc below the same period last year though they remain 16 per cent higher than two years ago. It also warned of uncertainty caused by inflation and war in Ukraine.

AJ Bell investment director Russ Mould said: ‘Kingfisher benefited from people looking to do up their homes during the pandemic, however the world has since moved on and, despite management reporting a strong start to the current year, there has to be a risk that the company’s moment in the sun has passed.’

And Global Data retail analyst Kunaal Shah said: ‘We anticipate a harder year for DIY specialists in 2022 as demand for home improvement slows down now that consumers are at home less, and as high inflation constrains consumers’ budgets.

‘Inflation will lead consumers to focus their spend on essentials, hitting demand in the home-improvement market over the course of the year.’

Kingfisher insisted demand is ‘resilient’, and expects profits of around £769million for the current year, down on last year but still ahead of pre-pandemic levels.

Shares have more than doubled since the Covid lows of March 2020, giving it a value of £5.6billion.

It has been boosted by the shift toward remote working, which has prompted homeowners to spruce up their living spaces.

It has also benefited from a strong housing market spurred on by record low interest rates, cheaper mortgages and a ‘race for space’.

And as energy bills soar and consumers face a cost of living crisis, it expects a further boost from people finding ways to make their homes more efficient.

Amid an exodus of Western brands from Russia, Kingfisher has stopped sourcing products from the country and its ally Belarus. It has not had any stores in Russia since 2020.

This post first appeared on Dailymail.co.uk