Kingfisher plc (LON:KGF) has announced its intention to return in full the UK and Republic of Ireland business rates relief received as a result of the COVID-19 crisis. Earlier this year the Company repaid in full the amount received of £23 million under the UK Government’s Job Retention Scheme.
Throughout the crisis, Kingfisher has operated under a clear set of priorities – to serve our customers as a retailer of essential goods, to look after our colleagues as a responsible employer, to provide support to the governments and communities in which we operate, and to protect our business for the long term.
At the outset of the first national lockdown earlier this year, despite being recognised as a retailer of essential goods, we took the initial decision to close our B&Q and Screwfix stores in the UK for in-store browsing and purchasing. While this resulted in a significant adverse impact to our trading performance, the temporary closures enabled us to protect our colleagues and customers, limit the spread of the virus, and reconfigure our retail space and processes to ensure the safe reopening of our stores. Kingfisher benefited from, and was thankful for, the financial support measures it received from the UK and Irish governments which, together with our own measures to reduce costs and preserve cash, helped us to protect jobs and limit the financial impact of COVID-19, in the face of significant uncertainty.
Since reopening our stores in late April and early May, our sales performance has been strong, supported by higher demand for home improvement across our markets and by the significant progress that the business has made under our ‘Powered by Kingfisher’ strategy. While uncertainty remains in the markets in which we operate, we are confident that we can address the key risks we face, and that as our strategy is delivered we will be able to continue to grow our business.
We have been active in supporting our communities and governments and we have already repaid the full amount received of £23 million under the UK Government’s Job Retention Scheme. Given the resilience of our business, the Board has now decided to return the UK and Republic of Ireland business rates relief. Kingfisher’s total annual business rates bill eligible for this relief is approximately £130 million, of which c.£110 million falls in FY 20/21 and the balance in FY 21/22.
Following this decision, we now anticipate that FY 20/21 adjusted profit before tax will include c.£85 million of non-recurring cost savings (previous guidance: c.£175 million), net of any one-off COVID-related costs.
Thierry Garnier, Chief Executive Officer, commented:
“Government support through this crisis has been invaluable for many companies, including ours.
“We also took swift action within our business in response to the pandemic to protect Kingfisher. We rapidly adapted our operations, both online and in-store, to fulfil the essential needs of our customers. We made significant investments to ensure the safety of our customers and teams, taking important steps to strengthen our balance sheet and limit the financial impact of COVID-19.
“These actions, combined with the roll-out of our new strategy and the hard work of our colleagues and teams, have delivered growth throughout the Group and led to the hiring of 3,500 additional colleagues. Given this resilience, and our commitment to support our communities, we believe that returning the UK and Irish business rates relief in full is the right thing to do.”
Andy Cosslett, Chairman of Kingfisher, commented:
“Kingfisher is in a sound financial position with continuing positive trading momentum, due to both strong consumer demand and the benefits of our strategy. We are pleased that we are in a position to do this, and hope that the money can now be redeployed by the government and local authorities where it is needed most.”
