Kingfisher full year profits surge 49%

Kingfisher, which owns B&Q, experienced a group like-for-like decline of 1.5%.

Group revenue edged up 1.1% to £10.5bn, on a constant currency basis. Financial net debt was reduced by 75%, at reported rates, to £250m.

In the UK & Ireland, including B&Q and Screwfix, revenue increased 1.2% to £4.4bn, while like-for-likes dropped 0.1%.

Retail profit soared 64.5% to £217m.

B&Q UK & Ireland’s revenue grew 2.6% to £4bn, while like-for-likes increased 1.3%. Retail profit rocketed 79.4% to £195m.

Better spring weather boosted sales of outdoor products at B&Q, while improved merchandising, new ranges and competitor withdrawal helped drive market share in showroom.

However, Kingfisher said both the Trade and the Irish markets were challenging throughout the year. However, B&Q has recently trialled ‘TradePoint’ a new section within existing B&Q stores dedicated to tradesmen. Kingfisher is now planning to roll this model out to 118 B&Q stores by this summer. National coverage in 118 large B&Q stores is expected by late summer 2010 from a capital investment of around £26m plus net working capital of around £4m.

Kingfisher’s French arm, comprising the two chains Castorama and Brico Dépôt, experienced 3.7% growth in retail profit, to £322m.  Total sales fell 0.6% to £4.2 billion. Like-for-likes dropped 3.4%.

Its Other International arm, comprising Poland, China, Spain, Russia, a Turkey joint venture and Germany, saw profits soar 77.8% to £125m, driven by strong growth in Poland and reduced losses in China, where a turnaround plan has led to losses almost halving in the year, to £34m.

The retailer expects its China business to make a profit in 2011/12.

Other International revenue increased 5.1% to £1.8bn. Like-for-likes dropped 0.2%.

The final dividend increased 5% - the first dividend growth for five years.

Ian Cheshire, group chief executive, said: “In generally weak consumer markets our self-help initiatives underpinned our robust performance, driving a higher gross margin, more cost efficiency and lower working capital.

 “We have also been busy laying the foundations for our future growth by broadening our product range into new categories, opening new stores and coordinating our buying activities to enable more common sourcing. We also made good progress with our corporate responsibility agenda and sales of ‘eco products’ topped £1 billion for the first time. 

“Looking ahead, we remain cautious on the outlook for consumer demand across Europe. However, we are confident that our experienced management team, successful international strategy and buying scale mean we will be able to drive continued growth through our own actions. Recognising our improved profitability, cash generation and future growth prospects I am delighted that the final dividend payment will be increased, the first dividend growth for our shareholders in five years.”