Kingfisher first-quarter profits down 50%

EUROPE’S top home-improvement retailer, Kingfisher Plc, posted a near-halving of first-quarter profit yesterday, and said it was still struggling with weak consumer demand in its core home market.

EUROPE’S top home-improvement retailer, Kingfisher Plc, posted a near-halving of first-quarter profit yesterday, and said it was still struggling with weak consumer demand in its core home market.

“The UK market remains very promotional and weather sensitive and it is not clear that stronger holiday sales represent an underlying recovery in demand,” chief executive Gerry Murphy said.

But Kingfisher shares were buoyed, in a falling market, by talk that private equity company 3i was interested in its Screwfix Direct online unit, dealers said.

Mr Murphy would not comment on those reports but the Cork man said: “Our trade business in the UK is very important to us and Screwfix is right at the centre of it. We think it is a great business and we are very happy to keep it and invest in it and we are expanding Screwfix aggressively.”

Kingfisher said like-for-like sales fell 2% in the 13 weeks to April 29, and retail profit fell 45% to £68.4 million (€101m).

Its largest unit, B&Q in Britain, saw profit fall 75% to £18m (€26.38m) and saw a three percentage points fall in gross margins.

“The first two months of the quarter were particularly weak as persistent cold weather in Europe delayed the start of the key garden and outdoor season, and a major fire temporarily disrupted B&Q’s kitchen deliveries,” Murphy said.

Like-for-like sales at British market-leading chain B&Q fell 8.8%, Kingfisher said, adding two points of the fall was due to the fire.

That fall was partly offset by a 1.7% rise in like-for-like sales at Castorama and Brico Depot in France, a 10.2% rise in the rest of Europe and an 11.8% rise in Asia.

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