Kingfisher said that more than £1 in every £10 it made last year came from energy and water-saving products as cash-conscious shoppers sought to reduce soaring energy bills, although demand did not prevent profits falling by a fifth.
The retailer, which owns do-it-yourself chain B&Q in the UK and French counterpart Castorama, posted a 20 per cent drop in adjusted pre-tax profit to £758mn in the year January 31, compared with £949mn the year before.
It also warned that profits were likely to fall even further this year to about £633mn, according to analysts, from their pandemic highs when people stuck at home embarked on extensive renovation projects.
Group like-for-like sales fell 2.1 per cent but the company was nevertheless boosted by demand for loft insulation, LED lighting, underfloor heating and electric radiators. About 11 per cent of £13bn of total sales, or £1.4bn, came from selling energy and water-saving products.
“During the year we expanded our range to better support customers to improve energy efficiency at home, while also helping them to save money,” said Kingfisher.
It also increased the number of own-brand products it sells, which are on average 15 per cent to 30 per cent cheaper than established names, the company added.
Chief executive Thierry Garnier, who has been spearheading a turnround of the home improvement group, said that inflation should ease from the second half of 2023 as some input costs such as freight come down, but he added it would take time for this to feed through to shoppers.
He said he was “very confident in our ability to grow the business” and that the company was “pursuing profitable opportunities” as part of his plan. At the onset of the Covid-19 pandemic, he introduced click-and-collect services and speedy home delivery.
Kingfisher said underlying sales had been resilient this year, with like-for-like sales up 0.5 per cent. However, Garnier cautioned that even though it “started the year pretty OK, we’re mindful of the uncertainty in the year ahead”.
The chief executive added that B&Q could open 50 small and medium-sized stores across the UK as it seeks to be closer to customers. “Smaller format is key,” he said. “We’re working hard on it.”
The group had £2.3bn of net debt, compared with £1.6bn the year before. The ratio of net debt to earnings before interest, tax, depreciation and amortisation was 1.6 times, and the company said one of its objectives was to “maintain a solid investment grade credit rating”.
Shares in Kingfisher were down 1.35 per cent to £2.70 by midday.
