B&Q owner Kingfisher kept warm by rising orders for insulation products

Kingfisher continued to post healthy sales results as rising electricity and gas prices led to an increase in demand for insulation products.

Britain’s largest home improvement retailer, which runs hardware store chain B&Q, reported a surge in orders for central heating controls, thermostatic radiator valves and smart room thermostats at its Screwfix stores.

As a result, the group’s total sales grew by 1.7 per cent at constant exchange rates to £3.26 billion in the three months ended October, despite European countries facing more difficult economic conditions.

Kingfisher CEO Thierry Garnier said sales were supported by the pandemic-induced trend to work from home and a looming need among consumers to save money on energy bills.

Energy costs for households and businesses have skyrocketed over the past 12 months following the easing of lockdown and travel restrictions and Russia’s full-scale invasion of Ukraine.

As a result, more consumers and businesses have looked to building materials such as insulation and wall panels that can retain more heat indoors, especially in Britain, which has one of the most drafty properties in Western Europe.

Revenues at Screwfix rose 4.9 per cent to £610 million, supported by solid demand from trade customers, increased market share and 19 new store openings, including the first two outlets in France.

Kingfisher’s performance in Poland was particularly strong, with sales up 10.5 per cent to £447 million thanks to higher orders for new kitchen ranges and weather-related categories.

The company’s sales grew in all markets, although it admitted trading was affected by the unusually warm weather that hit Britain and France in October.

In addition, the retailer said demand was further dampened by Queen Elizabeth II’s funeral in mid-September and widespread fuel strikes that led to shortages at gas stations across France.

Prior to these events, Kingfisher was already beginning to see the Covid-induced DIY boom weakening as Britons spent more time away from home and cost-of-living pressures increased.

Still, worsening inflationary pressures have led more people to buy goods that could potentially lower their gas and electricity bills in the long run.

The company also said it had set up energy saving services, in part to advise customers on which products to buy, with B&Q seeing 1,000 bookings in the three days following the programme’s launch.

Garnier commented, “As our customers face a rising cost of living, we are committed to making home improvement affordable and accessible – especially through our own exclusive brands, which represent 45 percent of our sales.

“While we remain vigilant about macroeconomic uncertainty, we remain confident in both the resilience of our industry and continued growth for our markets.”

Despite the optimistic outlook, Kingfisher cut its annual pre-tax profit forecast to £730 million to £760 million due to higher energy prices and wages, and investments in Screwfix’s new facilities in France.

Kingfisher shares were down 2 percent at 248.5 pence during the late afternoon on Thursday, meaning their value is down about 24 percent over the past year.