B&Q owner Kingfisher has posted a strong set of results for the first six months of its financial year and said there is "no evidence" the EU referendum result dented its performance, sending its shares up two per cent at the open.
The DIY giant, which also owns Screwfix, said underlying pre-tax profits were up 13.5 per cent at £436m in the six months to the end of July. That was a touch above analysts' expectations.
Earnings were generated off sales of £5.7bn, 6.8 per cent up on the same period last year. The UK and Ireland accounted for £2.5bn in sales, up 6.7 per cent on a like-for-like basis. Sales in France, Kingfisher's other big market, were down 1.6 per cent on a like-for-like basis, but up 10 per cent to £2.2bn overall.
The retailer also increased its dividend by a fraction, from 3.18p per share to 3.25p per share and more than doubled its net cash holding to £898m, despite returning £317m to shareholders in the form of a dividend and share buyback scheme.
Why it's interesting
Kingfisher was one of the early firms to downplay the impact the UK's vote to leave the EU would have on their results, stating they had seen no signs of fraying consumer confidence at its stores. They've stuck by that narrative as we approach the three-month anniversary of the vote in another boost to the health of the UK's post-referendum economy.
Despite stating on three separate occasions in the interim report the referendum has not yet affected the firm, Kingfisher did announce it had created "a working group to monitor developments and the potential future impact of Brexit".
All of which is particularly interesting given former Prime Minister David Cameron held a big campaign rally in B&Q's headquarters before the EU referendum to warn of the domestic turmoil which would follow a vote to Leave.
However, resilience in the face of Brexit was only one aspect of Kingfisher's "business as usual" results, with solid progress on a five-year turnaround programme also bearing fruit. Another 22 B&Q stores were closed over the period, and Kingfisher advised that "total expected transformation costs for this year are lower than originally guided".
Early fruits of that programme can be seen in the 39 per cent jump in B&Q's online sales, while like-for-like business at Screwfix in the UK was up by 15 per cent and mobile sales more than doubled.
What Kingfisher said
Chief executive Veronique Laury hailed Kingfisher's turnaround scheme, saying the UK and Poland were bright spots in their European portfolio.
Laury said: "It has been a productive first half. We have delivered a good 'business as usual' results with both sales and profit growth.
"In the UK, the EU referendum has created uncertainty for the economic outlook, even though there has been no clear evidence of an impact on demand so far on our businesses. In France we remain cautious on the short term outlook."
Kingfisher also said investors should prepare for a bumpy road ahead as its £800m transformation picks up. The firm said they will be stripping out old product ranges, putting pressure on their suppliers and delivery network and bringing in new merchandise.
Laury said: "The level of transformation activity will increase significantly, however given the expertise and energy of our colleagues we continue to feel confident about the challenges ahead."