B&Q owner Kingfisher finds insulation against DIY decline

DIY boss wants the chancellor to prioritise help for the poorest but his call is likely to be ignored, says James Moore

B&Q owner Kingfisher has reported a 30 per cent drop in profits (PA)

Kingfisher is finding there are fewer DIY fish in the pond than it might have hoped. The group, which owns B&Q and Screwfix in the UK, took something of a beating on the stock market after its interim results revealed a 30 per cent tumble in first-half profits.

The shares recovered somewhat after the company and its people did the rounds with their DIY PR fixit kits, hammering home the message that trading so far has been more resilient than parts of the city had initially given Kingfisher credit for.

They were at pains to stress that sales were still 16.6 per cent above pre-pandemic levels on a “like-for-like” basis, an industry-favoured metric that focuses on stores open at least a year. “Very resilient,” is how CEO Theirry Garnier described this.

The group also said that its recent trading suggested that a full-year earnings forecast of £770m in profits would hold up. Some investor concern may have been sparked by it running various scenarios, the most testing of which would leave the retailer £40m light of that.

It is clear that the DIY boom triggered by Covid lockdowns is over and the cost of living crisis is inevitably going to make for heavier weather.

Doing it yourself is considerably cheaper than calling someone in (Kingfisher is exposed to that latter side of the business through Screwfix, which supplies the trade). But I suspect that the crisis is putting people off from doing anything at all. Home improvement plans are inevitably going to fall away when people have more pressing calls upon their resources, such as paying the bills, particularly the mortgage.

They are poised to rise sharply for those on variable rates on Thursday. People coming to the end of fixed-rate deals are also in for a nasty shock when they look at their remortgaging options. The fallout from the Bank of England aggressively raising interest rates will be considerable.

But Garnier had a point. Kingfisher is holding its own in the midst of this storm. There was also one notable, and very welcome, chink of light in its results. The company said sales of home insulation products boomed over the reporting period. And they are continuing to do so.

The group – Kingfisher has 1,300 stores in nine countries – has enjoyed a 70 per cent increase in sales over just the last three weeks when compared to the pre-pandemic period. Year on year, sales were up 32 per cent. The figures for Britain are rosier still: a 110 per cent increase over the last three weeks and an 82 per cent year-on-year rise.

That is not just welcome from a Kingfisher perspective. It is welcome from a policy perspective. It bears repeating that Britain would be in far better shape to handle the energy crisis over the winter if it had put more effort into improving the energy efficiency of its lamentably draughty housing stock. Like so much else, the government’s record on that subject has been miserable.

That householders are making efforts to address this off their own bat is most welcome. Soaring bills have, it seems, concentrated minds.

Just not those of ministers. They could further improve the situation by doing more to incentivise home insulation projects, and by targeting such help at lower income groups. These projects are out of reach to the less fortunate, who are getting hit hardest by the energy price shock.

But it seems that the better-off are the priority. They look set to get a further boost from what is expected to be a tax-cutting “mini-Budget” courtesy of chancellor Kwasi Kwarteng on Friday.

Garnier called on the government to announce more support for people on lower incomes. That goes beyond insulation. He was right to do so and he is far from alone in making such a plea. Sadly, all the indications are that it will go unheeded.