B&Q owner Kingfisher will explain how the DIY industry is progressing as consumers face shrinking household budgets and the housing market slows.
T.The FTSE 100-listed company is set to report final-quarter transactions to shareholders on Thursday, and investors are keeping an eye on the company’s prospects for home improvement retailers.
Kingfisher, which owns tool retailer Screwfix, reported lower profits in its September six-month performance. This is as it tackles rising costs and dampens the DIY boom caused by the pandemic.
The company is struggling with supply chain disruptions that have intensified since Brexit, the pandemic and the war in Ukraine, impacting the cost and supply of raw materials, especially metals and plastics.
Kingfisher, owner of B&Q, expects cost of living pressures in the renewal process as consumers make tough choices about how they spend their money.Susanna Streeter Hargreaves Lansdowne
He noted that supply tensions have eased since the peak at the beginning of the year, but investors need to see how the business has managed cost inflation since then and pass on price increases to customers. I would like to know the latest information about whether
Additionally, with many households concentrating on spending amid a tight cost of living, the DIY giant sheds light on how sales are progressing.
Analysts believe some major home improvement projects are on hold because people are making “hard choices” about spending.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said:
“The massive DIY home boom during the pandemic is waning.
“Now with rising mortgage payments and rising food and energy costs, disposable cash is probably scarce, and it can be difficult to borrow money for large projects.
Streeter added that the group could be affected by a slowdown in the housing market if it reflects people delaying moves and forcing new properties out.
“However, people can reap some benefits from making small changes to their existing homes, and demand for energy-efficient products such as attic insulation will remain strong.
“Like other retailers, B&Q has already been hit by rising energy costs, which has translated into profit margins, but supply chain issues continue to subside given the problems caused by the crisis. Signs are welcome.”
Kingfisher’s stock has fallen nearly 30% over the year, emerging from a pandemic-driven DIY boom.
Author: Anna Wise, Pennsylvania Business Correspondent
Source: Belfast Telegraph