Kingfisher profits up 23%

Group sales were flat at £10.45bn.

For the year ending January 29, UK and Ireland, which includes B&Q, reported retail profits up 11.8% to £243m, French retail profits were up 12% to £348m, and international retail profits were up 34.3% to £171m.

Full year dividend was up 28.5%.

The group said it saw scope to expand its store network in existing markets to more than 1,100 from 856, as well as opening up in new countries.

Ian Cheshire, group chief executive, said: “We have delivered another year of strong profit growth and cash generation in what continue to be challenging times for our customers around the world.”

B&Q UK & Ireland’s total sales were down 2.8% to £3.9bn, and down 3.3% on a like-for-like basis. It said sales of outdoor products fell around 1% despite mixed weather and following strong growth last year, up 6%.

Underlying kitchen sales were up as a result of improved ranges and merchandising, up 7%.

Retail profit grew 10.4% to £215m, with gross margin percentage increasing by a further 110 basis points, driven by more direct sourcing.

The roll out of the new B&Q TradePoint offer in its larger stores was completed, adding sister brand Screwfix’s ranges at trade prices.

Kingfisher’s Delivering Value strategy – a seven step programme to improve cash returns – is “progressing well” said the retailer.

After two years into the programme, its adjusted earnings per share have increased by 93% and dividends have started to rise again for the first time in five years.

The programme is due to be completed in its 2011/12 financial year and the seven points are driving B&Q profits; exploiting UK trade opportunities; expanding its French business; rolling out in Eastern Europe; turning around B&Q China; growing group sourcing; and reducing working capital.

Kingfisher said self-help measures at B&Q have rebuilt its retail margin to 5.6% despite difficult market conditions. It is on track to achieve a sustainable 7% operating margin.

This year it wants to revamp stores, set up ‘You can do it’ DIY centres in 15 large stores, and up its direct sourcing by around 15%.

Cheshire said: “Our ‘Delivering Value’ programme of self-help has been a great success so far with profits almost doubled since it started, return on capital up sharply and financial net debt eliminated. Despite significant economic headwinds over the last few years we are now a stronger, more valuable business. I am also delighted that we are now better able to accelerate our expansion where economic returns have been proven whilst also significantly increasing our dividend for our shareholders, many of whom are now our own colleagues.”

Kingfisher said it will continue to deliver value to shareholders by focusing on its key priorities of management, capital and returns.

Cheshire said: “Looking ahead, although I see no let up in the challenging environment in the short-term, I am excited by our future prospects. This year we will be stepping up the pace once more with a full set of activities in the final year of the first phase of ‘Delivering Value’ as well as mobilising the second phase, which is due to start in 2012.

“I believe we have an exciting growth opportunity, sustainable over the longer term, by creating a business that is the world’s expert at making home improvement easier for customers. We are uniquely placed to use our scale, our network of international experience and our diversity for the benefit of our customers and shareholders.”