Home improvement retail group Kingfisher saw healthy growth in profits during its third quarter despite almost flat sales growth, according to results published today.
Total sales increased a mere 0.3 per cent in constant currencies in the 13 weeks to October 30th but retail profit rose by 8.2 per cent to £240 million thanks in large to continued margin and cost self-help initiatives across the group.
UK & Ireland was the weakest performing region for the B&Q and Screwfix owner, with profits creeping up by 0.6 per cent in constant currencies compared to 2009.
Like-for-like sales in the domestic market fell 4.2 per cent and total sales decreased by 3.7 per cent year-on-year, as the UK & Ireland results compared against strong trade from last year.
Ian Cheshire, Group CEO for Kingfisher, said: “This quarter is significant for our overall annual profitability and I am pleased that our well established programme of self-help initiatives continued to deliver another solid performance.
“In particular, our businesses outside the UK performed strongly, accounting for 80 per cent of the quarter’s profit.”
International performance was strong in Q3, with profits excluding France and the UK & Ireland rising an impressive 21 per cent, in a market where trading has been tough.
Tom Gadsby, Retail Analyst at financial services business Matrix, commented: “After years as a conglomerate and then an unfocused start to life as a ‘focused’ DIY retailer, Kingfisher now seems on the verge of making the most of its scale.
“While the UK clothing sector has been buoyant over the past year, the DIY market has been a more difficult place to do business. LFL sales have been negative across the whole DIY subsector and, yet, against this backdrop, Kingfisher has done well to grow margins.”
Of it’s UK based operations, Screwfix outperformed B&Q with the former recording a 4.1 per cent growth in sales during the quarter whilst the latter’s sales fell 4.7 per cent.
A lower footfall at B&Q saw sales drop almost equally across all sections, with kitchens proving the exception with gross sales increasing 13 per cent during the period.
Cheshire added: “In the UK & Ireland, where we were trading against tough comparatives, we were able to maintain our profit for the quarter despite on-going tough trading conditions and continued investment in developing both our consumer and trade offers.
“Right across the Group our sourcing initiatives and scale are increasingly being brought to bear to improve our customer offer and enhance our profitability.”