Kingfisher weathers B&Q pressure
17 February 2011 09:50
B&Q owner Kingfisher today forecast a 20% rise in annual profits after strong international growth offset continued tough trading in the UK.
The group expects adjusted pre-tax profits for the year ending last month to be at the top end of City expectations, which range from £661 million to £672 million, after strong sales in countries such as Poland and Russia.
Analysts said the UK and Ireland division remained under pressure, despite like-for-like sales at B&Q showing a decline of 0.3% in the 13 weeks to January 29th, an improvement on the 5.1% seen in the previous quarter when comparisons with a year earlier were tougher.
Total sales at the UK stores were up 0.1% to £835 million as the disruption from the snow in December delayed the installation of kitchens but prompted a 43% hike in winter fuel sales and an 11% rise in demand for portable heaters.
Its building supplies arm Screwfix also put in a stronger performance, with sales up 5.4% to £119 million after it introduced new ranges.
Chief executive Ian Cheshire was cautious about B&Q's outlook for the current financial year following the increase in VAT to 20% from 17.5% in January.
He said: "I'm expecting a difficult general market in the first six months with some improvement after that.
"We are not assuming any help from a buoyant market in the UK. It's more about trying to gain market share than expecting the market to be in recovery.
"The rising cost of petrol was also a worry because it could make consumers less likely to drive to stores", he added.
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