B&Q owner Kingfisher first-half profits dip 1.4% in UK and Ireland

Kingfisher’s like-for-likes for the UK and Ireland dipped 1% in the half to August 3 as total sales edged up 0.2% to £2.27bn. UK and Irish retail profit was £141m against £143m last year as gross margins increased 30 basis points.

The DIY group said first-half sales benefited from a surge in outdoor seasonal products, which rose 6%, however, this was offset by a slower underlying market impacted by weak consumer confidence.

B&Q UK & Ireland’s like-for-likes fell 1.7% as total sales decreased 1.8% to £1.95bn.

It said sales patterns were “unusually volatile” across the first half driven by the extreme weather. At B&Q seasonal products were down 11% in the first quarter while sales in the category soared 17% when the warm weather hit in the second quarter.

Kingfisher group chief executive Ian Cheshire said: “After a difficult first quarter, in which sales and profits were affected by record bad weather, we were able to capitalise on the better weather in the second quarter particularly in the UK to grow quarterly profits and deliver a broadly flat result across the half.

“However, underlying consumer confidence remains weak in our major markets, so we continue to focus hard on our self-help initiatives to drive growth, margin and cost efficiencies.”

The retailer is rightsizing the B&Q UK store portfolio. It has completed one freehold store and has 17 further agreements in place which are subject to planning permission.

If all 18 go ahead, B&Q will have reduced its UK space by 5% and will save £16m annually in rents and £7m in rates.

Kingfisher is to expand its trade-focused fascia Screwfix overseas. It has already rolled out its website to 20 European countries and is to open four stores in Germany by summer 2014.

Screwfix total sales jumped 14.6% to £313m in the half as like-for-likes increased 3.6%. Kingfisher said the fascia had benefited from extended opening hours, new ranges and the roll-out of new stores. It opened 19 stores during the half taking its total to 294.

Across the group, Kingfisher’s adjusted pre-tax profits fell 1.6% to £365m as like-for-likes dipped 0.8%.

Total sales increased 4.3% while retail profit slipped 1.8% to £394m.

Statutory post-tax profits soared 69.9%, including £145m credit from the resolution of its French tax case.

Cheshire said: “Looking ahead, we remain ready to capitalise on any improvement in conditions or opportunities as they arise, including the potential pick up in the UK housing market. In the meantime, our self-help plan, ‘Creating the Leader’, continues to progress well, including the acquisition of 15 stores in Romania, our first new country entry in seven years.”