B&Q owner joins exclusive £1bn profit club

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23rd March 2022

Bite-sized business news from the UK and beyond

Good morning If all goes to plan, later today the UK and Ireland should be named as hosts of Euros 2028… after being the only bidders. Russia had been in contention but abandoned their bid following the invasion of Ukraine while Turkey had been unsuccessful in several previous efforts and did not want to challenge the British and Irish bid. Here's hoping to a better ending than last summer's Euros!

Today's stories

B&Q owner joins exclusive £1bn profit club
Insurers accused of charging people of colour higher premiums

RETAIL
B&Q owner joins exclusive £1bn profit club

What’s going on?
B&Q and Screwfix owner Kingfisher recorded a £1bn profit in the 12 months to January - the best year in its 40-year history. The group has become only the third British retailer to reach the milestone.

Why is this important?

The past two years of the pandemic has meant more time spent at home either for work or leisure. To adapt to this new way of living, Brits have transformed spare rooms into offices and refurbished gardens for outdoor entertaining to reduce their Covid risk.

This enthusiasm for home improvements helped Kingfisher report a 33% jump in profit and a 7% increase in revenue to £13.2bn.

The DIY chain joins Tesco and M&S as the only businesses in the UK retail sector to make at least £1bn in profits.

The company, which also owns DIY stores in France, Poland, Spain, Portugal and Romania, said that it has removed Russian and Belarusian products from its shelves following the invasion of Ukraine.

Like many businesses Kingfisher has flagged that rising inflation will be a major challenge this year with the low availability of shipping containers and building material shortages, pushing up costs. But the company has pledged to keep prices competitive to help consumers manage the ongoing cost of living squeeze.

It also announced that, amid stiff competition for labour, wages would rise with B&Q workers getting a 6.5% increase to £9.80 an hour and 5.4% at Screwfix to £9.70 an hour. Both ahead of the new minimum wage of £9.50 which starts in April.

Zooming out

Kingfisher shares have jumped 135% since the start of the pandemic but fell by 6% yesterday as the company warned that the home improvement boom may have peaked. Sales in the past two months are down 8% on the same period in 2021 and investors are concerned that as household bills rise customers may tighten their budgets and cut back on DIY spend.

Other stories to keep you in the loop

Freer trade: US rolls back Trump-era tariffs on UK steel
Spring finances: What to expect from Rishi Sunak's Spring Statement
Lonely London: London shunned for IPOs as firms head abroad
Credit extended: NatWest to launch ‘buy now, pay later’ credit scheme this summer
Damage control: THG hires ex-ITV boss as chair in push to repair relations with the City
Back to the skies: Airline Flybe set to relaunch flights in April after collapse
Payback: P&O to pay £37m in compensation to 800 sacked workers
Restitutions: Victims of Post Office scandal to benefit from new compensation scheme
Red anger: Manchester United fans hand Glazers ultimatum over delayed share scheme
Breaking news: BuzzFeed investors have pushed to shut down entire newsroom

INSURANCE
Insurers accused of charging people of colour higher premiums

New research by the Citizens Advice Bureau suggests that drivers living in areas of the UK where there are a higher proportion of ethnic minorities, on average, pay more for their car insurance.

The consumer charity says that over 750,000 people could be impacted by this so-called “ethnicity penalty” with the gap between white people’s premiums being at least £280 and as much as £950 in some areas.

Citizens Advice carried out hundreds of mystery shops for car insurance quotes using profiles that varied by both name and postcode. Name and postcode were used to proxy for the ethnicity of a customer. All other details including age, gender, marital status and job type remained the same. The aim was to compare areas with a high white population with those where there was a high proportion of people of colour.

The analysis found that in some areas the difference in price was more than 100%, and that common risk factors such as crime rates and poverty levels could not account for this.

The main insurance industry trade body disputed the report’s conclusions, saying insurers don’t use race as a factor when setting prices.

In theory, insurance premiums are based on your risk profile like age and occupation, but in reality how insurers prices individuals is not always clear. As the industry evolves and the use of ‘big data’ and artificial intelligence in setting prices become more common, there is a risk that these inequalities will become more perpetuated and amplified.

Stat of the day

Global music revenues grew by 19% in 2021 to $26bn, the highest level on record, driven by a 18% jump in paid streaming subscribers to 523m users

Interesting links from around the web

The realities of the four-day workweek
How to tell if someone is stealing your Wifi (and boot them off)
The 5 most boring and exciting jobs in the world, according to a recent study

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B&Q owner joins exclusive £1bn profit club

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