Kingfisher weathers B&Q slowdown
Published: 18 February, 2011
LONDON: B&Q owner Kingfisher has forecast a 20% rise in annual profits after strong international growth offset continued tough trading in the UK.
Strong sales in countries such as Poland and Russia mean the group expects adjusted pre-tax profits for the year ending last month to be at the top end of City expectations that range from £661m to £672m.
Analysts said the UK and Ireland division remained under pressure, despite like-for-like sales at B&Q showing a decline of 0.3% in the 13 weeks to January 29, an improvement on the 5.1% seen in the previous quarter when comparisons with a year earlier were tougher.
Total sales at the UK stores were up 0.1% to £835m as the disruption from the snow in December delayed the installation of kitchens but prompted a 43% hike in winter fuel sales and an 11% rise in demand for portable heaters.
Its building supplies arm Screwfix also put in a stronger performance, with sales up 5.4% to £119m after it introduced new ranges.
Ian Cheshire, chief executive was cautious about B&Q's outlook for the current financial year following the increase in VAT to 20% from 17.5% in January.
"I'm expecting a difficult general market in the first six months with some improvement after that," he said.
"We are not assuming any help from a buoyant market in the UK. It's more about trying to gain market share than expecting the market to be in recovery."
The rising cost of petrol was also a worry because it could make consumers less likely to drive to stores, he said.
Ends 265 words