Kingfisher profits up as it eyes new markets for growth

The DIY giant is also eyeing expansion in new markets as it seeks to grow.

B&Q UK & Ireland’s retail profit grew 10.9% to £238m. Gross margin was up 30 basis points “against tough comparatives”, as the retailer benefitted from sales of higher margin products and more direct sourcing.

Like-for-like sales dropped 1.8%, while total sales decreased 0.9% to £3.8bn.

Kingfisher group sales grew 3.6% to £10.8bn while group retail profit jumped 15.7% to £882m.

Kingfisher France retail profit surged 20% to £423m. Like-for-likes were up 3.7% as sales increased 4.8% to £4.5bn.

The retailer said its four year transformation programme Delivering Value has “successfully repositioned” the retailer as a “stronger, more valuable business”.

Adjusted pre-tax profit more than doubled from £357m in 2007/08 to £807m in 2011/12. Kingfisher’s stock market valuation has more than doubled from £3.4bn to £7.2bn.

Kingfisher’s next phase – Creating the Leader – comprises eight areas of focus, including ‘expanding in new and developing markets’. Kingfisher said it will “research a new territory entry” as well as test a ‘Do it for me’ format in China.

Kingfisher chief executive Ian Cheshire, who won the Oracle Retail Week award for Clarity Search Retail Leader of the Year last week, said:  “I am pleased we have delivered another year of strong profit growth, our third such year in a row.

“Our relentless focus on the self-help initiatives that formed our four year ‘Delivering Value’ programme has borne fruit, generating a significant increase in the value of our business for shareholders.

“ Kingfisher is now well on the way to fulfilling its potential as the industry leader in home improvement.  

“Industry leadership will bring with it an outperformance in sales, profit and economic return, making Kingfisher a more valuable business.

 “Today we are embarking on the next phase of this journey. Our ‘Creating the Leader’ programme will see us emerge as a world-class retailer, helping customers have better, more sustainable homes.

“Whilst the immediate economic outlook remains uncertain, we face the future in robust shape and with our successful self-help approach now embedded in the way we do business.”

International total sales increased by 7.3% to £2bn, with like-for-likes rising 2.2%, across Poland, China, Spain, Russia, Turkey and Germany.

Retail profit was up 13.2% to £188m.

Other strands of the new strategy include ‘making it easier for customers to improve their home’. As part of this, the retailer will test new formats in the UK, France, Turkey, Russia & China.

It will also grow its presence in existing markets, with plans for a further 50 UK stores.

The DIY giant will focus on ‘giving customers more ways to shop’, which will include upgrading B&Q’s web offer.

Kingfisher will also build innovative common brands,  drive efficiencies, ‘develop leaders’ and focus on sustainability.