B&Q owner Kingfisher set to slash dividend

B&Q owner Kingfisher is expected to slash its dividend on the back of a major business review, it was reported today.

New chief executive Ian Cheshire could cut the payout by as much as 50%, the Sunday Times said, in a bid to help turnaround the home improvement retailer.

He will unveil his first set of annual results for the group on Thursday, with a third successive fall in profits expected amid continued tougher trading conditions.

Market estimates for group profits for the year to February 2 are estimated at £385m (€494m), down on £396m (€508m) for the year before and less than the £700 million made by B&Q alone in 2005.

Sources told the Sunday Times that no final dividend decision had been made by bosses, but they would be “shocked” if the payout was not cut.

Other moves that could be announced following the review by Mr Cheshire include a £400m (€513m) reduction in capital expenditure and increased cross-company sourcing.

The DIY sector has been hit hard by consumer belt-tightening, with the downturn in the housing market also hitting the market.

Kingfisher, which also owns Screwfix, said last month that it had seen a 2% drop in like-for-like sales for the three months to February 2.

The group is refurbishing its 324 B&Q stores with a new larger format designed to devote more space to showroom displays of complete kitchens and bathrooms as it seeks to move away from aisle-based layouts.

Last year’s Kingfisher’s total dividend payout was unchanged at 10.65p a share. This year the group has paid out an interim sum of 3.85p.

Mr Fisher headed up B&Q’s UK operation when he was promoted to the Kingfisher top job in January.

He replaced Gerry Murphy who announced his departure in November after five years at the helm.

Kingfisher is the world’s third largest home improvement retailer, with more than 780 stores in nine countries. Its other retail brands include Castorama and Brico Depot.