Home & DIY retail group Kingfisher expects full-year profits to be at the top range of estimates after trading at its UK operations improved in the fourth quarter, it was announced today.
In the 13 weeks to January 29th total sales at the retailer’s UK & Ireland operations increased 0.6 per cent year-on-year and 0.7 per cent in constant currencies, meaning like-for-like (LFL) sales remained flat for the period.
Kingfisher’s main UK company, and the largest retailer in the sector, B&Q saw trading creep up 0.1 per cent in Q4 and fall 0.3 per cent on a LFL basis, whereas its other domestic business Screwfix experienced a total sales boost of 5.4 per cent compared to last year - a 2.6 per cent LFL improvement.
Despite this uplift and strong international trading, full-year sales for the group fell 0.5 per cent year-on-year with the UK & Ireland its worst performing region as trading dropped 2.4 per cent in total and three per cent LFL.
Ian Cheshire, Group CEO for Kingfisher, said: “We have ended another challenging year in robust shape.
“Our programme of self-help initiatives has continued to deliver profit growth and higher returns whilst strengthening the business for the future.
“Our international businesses delivered strong growth in the final quarter, more than offsetting some weather disruption and a weak market in the UK & Ireland, and so we expect to announce full-year profits towards the top end of the range of analyst estimates.”
During the third quarter LFL sales in the domestic market fell 4.2 per cent and total sales decreased by 3.7 per cent year-on-year, so UK trading during the key Christmas period was much better for the group despite December’s snow.
Excluding business from France, the UK & Ireland total sales grew 5.2 per cent in the full-year, with trading in China, Russia and Spain all experiencing double digit growth.
The group now expects full-year pre-tax profit to be up over 20 per cent on the prior year, totalling around £670 million if expectations are correct.
Over the next year Kingfisher will be continuing its restructuring programme named ‘Delivering Value’, which is intended to improve cash returns and deliver a step-change in shareholder value.
Driving up B&Q’s UK & Ireland’s profits and exploiting UK trade opportunities are two of the main features of the programme.
Cheshire added: “Looking ahead we will continue with self-help activity in 2011 as we complete our successful ‘Delivering Value’ plan and start to mobilise the next phase of our development.”