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Kingfisher (KGF) sales slip as spending normalises

By David Burrows

07:43, 19 November 2021

B&Q store in Yorkshire, England – Photo: Alamy
B&Q store in Yorkshire, England – Photo: Alamy

Kingfisher Group pointed to a strong sales performance on a two-year basis across both retail and trade channels In its third-quarter trading statement released today.

The British-based DIY retail group, which owns brands such as B&Q and Screwfix in the UK and Ireland as well as Castorama and Brico Depot in France, also highlighted a good start to the fourth quarter. It said that as a result of this positive momentum, it expected second-half like-for-like sales and full-year adjusted pre-tax profit to be towards the higher end of previously guided ranges – £910m to £950m ($1.22bn to $1.27bn).

In the short term, however, total group sales have slipped, falling by 6.3% year on year in the three months to the end of October, from £3.46bn to £3.24bn.

The company pointed out that this represents “resilient demand against very strong prior-year comparatives,” an allusion to its stellar retail figures in 2020 when lockdowns resulted in a DIY boom. It was keen to highlight that the figures compare favourably with pre-pandemic sales – they were up 15% compared to the same period in 2019.

Normalised consumer spending

Commenting on the latest numbers CEO Thierry Garnier said he was encouraged by the two-year like-for-like sales growth of 15% and sales trends generally given the backdrop of an increasingly “normalised” consumer spending environment.


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He added: “We continue to grow our market share, driven by strong execution of our new strategy. We are pushing forward with investments in key areas of the business to drive long-term growth, including further enhancements to our e-commerce proposition and Screwfix’s launch in France. And we are progressing with our clear plans to deliver on our carbon reduction targets, aligned to 1.5°C to 2025, and to become ‘forest positive’ by the same year”.

Garnier concluded: “We have entered our final quarter with positive momentum and now expect sales and profits to be towards the higher end of our previously guided ranges. Overall, with strong execution and supportive new long-term trends for our industry, we remain confident of continued outperformance of our markets.”

Kingfisher’s stock rose modestly when the market opened in London – it was up by 0.6% at 337.20p.

 Read more: UK house prices fall in a bid to find buyers

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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