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Kingfisher profits up 24% despite B&Q sales fall


Kingfisher group has today announced an impressive 24 per cent growth in pre-tax profits to £439 million for its first half period.

In the 26 weeks ending July 30th 2011, sales across the group improved 1.6 per cent on a like-for-like (LFL) basis but the Screwfix and B&Q owner saw UK trading fall 1.5 per cent LFL over the same period. An improvement of 20 basis points in gross margin help B&Q boost retail profit by 4.5 per cent despite a LFL sales slide two per cent to £2.1 billion, whilst the smaller Screwfix operation grew total sales by 7.7 per cent and retail profit by 25.3 per cent.

During the half Screwfix trialled several smaller format stores and 30 of these size outlets will open over the next six months along with 10 standard stores, creating 1,000 new jobs across the country and costing £8 million in investment.

Ian Cheshire, CEO of Kingfisher, said: “We have delivered very strong profit growth in what are difficult times for all retailers.

“With around two thirds of our profit coming from outside the UK, these results clearly show the value of geographic spread and the benefits of operating our market leading international businesses in a more unified way.”

Castorama and Brico Dépôt, Kingfisher’s two French businesses, delivered profits of £201 million during the period, almost half of the group total and a 23.9 per cent improvement on the same period last year.

Strong profit growth was also delivered in Poland, Spain, Turkey and Germany and lower losses were posted in Russia and China, with its international segment boosting total profits by 24.7 per cent to £90 million.

The collapse of Focus DIY allowed B&Q to acquire 29 of its outlets whilst 135 ceased trading, but despite this growth in market share Kingfisher expects the impact from its rivals administration to be retail profit neutral before exceptional charges due to clearance period disruption to trading over the first half.

Cheshire added: “Looking ahead, economic uncertainty throughout Europe is likely to impact consumer confidence, meaning conditions will remain challenging for retailers.

“However, our plans already assumed little help from our markets and I am confident we will continue to outperform, benefiting from our well-established programme of self-help initiatives, international scale and breadth, and robust balance sheet.”

Published on Thursday 15 September by Editorial Assistant

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