Speculation around today’s budget has dominated the headlines this morning. B&Q owner Kingfisher has called on Rachel Reeves to reconsider planned tax increases for retailers before today’s spring statement, saying the industry is just as innovative on AI and robotics as US technology firms, which could be handed tax cuts.Thierry Garnier, chief executive of Kingfisher, said increases in employers’ National Insurance contributions and packaging taxes would raise its costs in the UK by £45m this year. An increase in the minimum wage from next month will add further costs (The Guardian).
It came as the B&Q and Screwfix owner unveiled a drop in annual sales amid sluggish consumer demand in France. In the year ending 31 January, the group’s sales slipped 1.5% to £12.78bn. The retailer’s total operating profit slumped 29.7% to £407m, while its pre-tax profit for the period fell 35.4% to £307m. Across the UK and Ireland, sales of ‘big ticket’ items at B&Q fell by 7.1% on a like-for-like basis.
Kingfisher shares fell 11.6% or 32.4p to 247.3p on Tuesday, having risen around 3% in the past year. Basic earnings per share almost halved, from 18.2p to 10.1p, and the group’s total dividend remained unchanged at 12.4p (Mail). Kingfisher has forecast profit growth this year of 2% at best, with its markets expected to remain subdued (Reuters).
Meanwhile, consumers are cutting back spending on everyday items amid falling confidence in the UK economy, according to a survey. As the Chancellor prepares to confirm billions of pounds in cuts to welfare and government spending, the research by KPMG showed growing numbers of people in Britain believed the economy was heading in the wrong direction. The survey of 3,000 UK consumers found 58% felt Britain’s economy was worsening in the three months to the end of February, an increase of 15 percentage points from the three months to the end of November (The Guardian).
The outlook is slightly more positive for Fever-Tree, which is expanding its share buyback scheme by another £29m after core profits slightly exceeded expectations last year (Mail). The posh mixer brand now expects to return up to £100m to shareholders during 2025, having announced a £71m share buyback in February. It reported adjusted earnings before EBITDA increased by two-thirds to £50.7m in 2024, just ahead of the £50.6m forecast by analysts, thanks to lower glass costs and transatlantic freight rates. However, turnover only rose by 1% to £364m as consumer sentiment in the UK and Europe remained subdued amidst inflationary pressures.
In more soft drinks news, The Coca-Cola Company is in talks to return to the top tier of the Premier League’s commercial partners after a three-year hiatus, Sky News reports. It understands that the US-based soft drinks giant is in advanced talks to become an official partner of English football’s top flight, following a previous deal that expired in 2022.
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