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The Markets
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Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK

Retail

Soft France and currencies weigh on Kingfisher

Overall retail profit rose by 0.4% to £223mln at constant currencies

A downturn in the French home improvement market in France and currency turmoil limited profits at Kingfisher (LON:KGF).

Kingfisher said sales at DIY chain Castorama in the third quarter fell 0.2% on a like-for-like basis as the market stayed broadly flat.

A slightly better performance at builder's merchant business Brico Dépôt, where like-for-like sales lifted 0.4%, resulted in a 0.1% rise in total French sales.

B&Q UK & Ireland boosted like-for-like sales by 2.4% as demand for outdoor seasonal and building products rose 6.3%.

Sales of indoor products, excluding showroom products, were up 1.8%, Sales of showroom products gained 0.4%.

Trade counter Screwfix lifted like-for-like sales by 13.3%, driven by online business, new and extended trade ranges and 13 new outlets.

But Kingfisher said UK gross margins fell 120 basis points - 1.2 percentage points - reflecting mix effects from strong growth in Screwfix and higher sales of seasonal products in B&Q.

That was offset by on-going cost initiatives at B&Q and the strong overall performance at Screwfix.

Overall retail profit rose by 0.4% to £223mln at constant currencies on a 4% rise in sales to £2.65bn on the same basis.

Adverse foreign exchange movements on the translation of non-sterling profits of £17mln hit profit, plus £5mln of extra store development in France and Poland against a year ago.

Chief executive Veronique Laury said the results reflected a more encouraging economic background in the UK, offset by a softer market in France, but she said the group was making good progress with merging its various IT systems and disposing of non-core B&Q shops.

"I am very encouraged by development work on the first wave of the unified 'core essential' ranges, which will land in stores from next year," she added.

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