Kingfisher's profits dip in third quarter
Kingfisher, the owner of B&Q and Screwfix, has reported that its third quarter retail profit dropped by 6.9% to £225 million in constant currencies after the group incurred development costs of £6 million in its new markets of Germany, Portugal and Romania.
On a reported basis, retail profit dropped by 11.8% in the 13 weeks to 1 November as Kingfisher was hurt by foreign currency movements.
Group sales were impacted by difficult trading conditions in France which meant that like-for-like sales dropped by 0.9%. Total sales across the group rose by 1% to £2.8 billion in constant currencies.
In the UK and Ireland, retail profit increased by 11.2% to £70 million helped by a stronger UK economy and improved levels of housing construction. Total sales climbed 4.9% to £1.1 billion million while like-for-like sales rose by 2.6%.
At B&Q, like-for-like sales edged up 0.5% while at Screwfix they rose by 13.1%. The retailer attributed the Screwfix performance to a strong promotional programme, new ranges, the continued roll out of new outlets and the successful take up of the mobile 'Click, Pay & Collect' offer.
Kingfisher chief executive Sir Ian Cheshire, who is due to step down at the end of the current financial year, said: "Trading conditions in our largest and most significant market, France, were particularly difficult and deteriorated across the quarter, impacted by the weak economic backdrop.
“In the UK however, where conditions have been more favourable, we have delivered LFL growth with Screwfix performing particularly well, delivering a 25% increase in sales on top of very strong growth last year. Overall, we remain cautious on the outlook, especially in France, and continue to focus on margin and cost initiatives to support our performance.”
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