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There's very tough times ahead for the UK, warns Kingfisher
The boss of B&Q owner Kingfisher yesterday predicted "very tough times ahead" as consumers come under pressure from rising bills and a slowing economy.
Chief executive Ian Cheshire added that the UK was particularly at risk as the nation responds to the slump in its housing market.
The grim assessment came despite Europe's biggest DIY retailer delivering forecast-beating half-year profits.
Adjusted pre-tax profits for the 26 weeks to August 2 rose 23 per cent from 174m to 214m, ahead of City forecasts of 203m, as group retail sales increased 2.5 per cent to 5.13bn.
Mr Cheshire said: "We have delivered a solid set of results in a difficult period for consumers.
"We have grown sales and our profits have benefited from actions to improve margins and manage costs.
"We continue to anticipate very tough times ahead, especially in the UK."
Kingfisher enjoyed a stronger-than-expected performance at the group's European operations.
Trading at the divisions, which include Castorama and Brico Depot, were boosted by the strength of the euro, while the group also benefited from booming sales in Poland, which surged 20.6 per cent.
Like-for-like sales at B&Q during the period were down 4.6 per cent as sales growth at its revamped larger stores and demand for new ranges offset weak demand for outdoor goods and the impact from slower consumer spending and disruption from store improve- ments.
However the chain's profits rose from 78m to 83m due to lower levels of promotional activity and sales of higher margin decorating ranges.
Kingfisher said its overall UK business has outperformed the domestic home improvement market, which fell 2 per cent in the first half of the year, due to strong growth from its trade divisions Screwfix and Trade Depot.
Screwfix sales rose 20.4 per cent to 251m, driven by the continued roll out of trade counters. The company gave no sales update on trading since August 2.
The figures come as Mr Cheshire leads a seven-point recovery plan for the group. The proposals include lifting B&Q profit margins, expanding its UK trade business, boosting growth in France and eastern Europe and turning round its operations in China.
Kingfisher has a significant presence in Yorkshire, with more than 20 B&Q stores and another nine Screwfix counters.
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Friday 25 May 2012
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