Kingfisher cost cuts boost profits
Published: 18 February, 2010
LONDON: Cost cuts and business improvements have helped Europe's biggest do-it-yourself retailer Kingfisher, nudge up profit forecasts, despite the recent bad weather.
The company remained cautious on 2010. Ian Cheshire, chief executive said: "Customers, courtesy of the weather, really went into hibernation after Christmas and probably aren't going to come out again until we see spring in the air."
Mr Cheshire said there were encouraging signs, like a pick-up in housing market deals and a trend towards do-it-yourself as cash-strapped consumers spend more time at home.
However, Kingfisher was planning conservatively and continuing to focus on cutting costs and boosting profit margins by, for example, purchasing more goods directly from cheaper manufacturing centres in Asia.
"We're not rexpecting any help from the market," said Mr Cheshire.
Kingfisher, which operates B&Q in Britain and Castorama in France, said sales at stores trading for at least a year fell 3% in the three months to January the fourth quarter of its financial year.
That included falls of 3.5% at B&Q, 4.6% at French chains Castorama and Brico Depot, and 4.7% in Poland as bad weather kept shoppers at home for much of January.
Gross profit margins were "up strongly" at B&Q and flat in France, following a trend which saw Kingfisher raise profit expectations throughout 2009.
Kingfisher expects profit before tax and one-off items for the year ended January 31 to be slightly ahead of the forecast £540m, up £368m from the year before.