There are brands that are wiser, or luckier, than others. When Leroy Merlin comes under fire for continuing his business in Russia, his competitor Kingfisher is released from any involvement in the war zone. The English group, owner of Castorama and Brico Dépôt brandsfinalized in 2020 the sale of Castorama Russia to the Russian company Maxidom.
“We no longer have any activity in the country and no direct exposure of our operations in Ukraine, Russia or Belarus”, specifies the company led by Frenchman Thierry Garnier in the press release for the publication of its annual results on 22 March.
Sales to professionals
“On March 1, we made the decision to remove from our shelves the small number of products that come directly from Russian and Belarusian suppliers. Regarding indirect supplies, we are currently making sure with our suppliers that the elements used in the composition of the products do not come from these countries, ”adds the text.
As a result, no shadow hangs over the good figures for the 2021-2022 financial year ended on January 31. Kingfisher took advantage of the Covid crisis which pushed the French and the British (the group operates B&Q and Screwfix in the United Kingdom) to improve the comfort of their interiors. The distributor is also present in Poland and Romania.
“The Covid crisis has set long-term trends that support our industry”, including “the renewed importance of the home, telecommuting and the development of a new generation of do-it-yourselfers”. , that is to say “the activities and DIY to do it yourself”, recognizes the group.
the turnover increased by 10% on a comparable basis, at 13.18 billion pounds, approximately €15.8 billion. Operating profit gained 25% to 1.14 billion pounds and profit after tax 42% to 843 million. The online sales represent 18% of volumes, compared to 8% in 2019-2020. The British press notes that Kingfisher is the third national retailer to reach the £1 billion profit mark.
In France, sales increased by 9.3% on a like-for-like basis and increased by 14.8% over two years. The operating margin of the French activities improved by 70 basis points, to 4.9%, while the operating profit grew by more than 20%.
Sales to professionals, driven in particular by the specialist brand Screwfix coming to France, reach half of the activity. Dedicated reception in B & Q saw their activity increase by a third. Castorama is considering installing them in its stores.
“Two years after the launch of our new strategy, we are ahead of our objectives”, summarizes the managing director who broke with the ultra-centralized One Kingfisher strategy of his predecessor Véronique Laury.
Redemption of shares
Shareholders are being rewarded with a dividend of 12.40p per share up 50% and a £300m share buyback plan. When the results were announced, the price nevertheless lost 4% in session, or 18% since January. Investors expect more.
“While the macroeconomic and geopolitical context is uncertain”, Thierry Garnier says he is “confident” that the group’s strategy, its investments and the good health of the DIY market will bring “an acceleration in sales and profit growth “. Kingfisher is already reporting “an encouraging start to the first quarter, with resilient demand across all of our markets”, all without supply chain disruption due to the war in Ukraine, with pressure on manageable price.
Kingfisher will continue the development of Screwfix with 80 new units across the Channel and a first warehouse in France. Twenty new Castorama will open in Poland.