B&Q owner Kingfisher sees profits fall

The firm, which runs the market-leading B&Q chain in Britain as well as Castorama and Brico Depot in France and elsewhere, also faced tough comparisons with a period of buoyant trading last year when sales were boosted by fine spring weather.

Kingfisher, with about 950 stores in eight countries in Europe and Asia, said on Thursday its retail profit fell 8.6 per cent to £160m in the three months to April 30.

That puts it at the bottom end of analyst forecasts which ranged between £160m-£165m, according to a company poll.

The outcome also reflected the currency impact of a weaker euro and Polish zloty on conversion into sterling.

Even excluding the impact of foreign exchange fluctuations, sales at stores open over a year fell 4.8 per cent year-on-year. The biggest drag was in the UK and Ireland where sales dropped 10.4 per cent on a like-for-like basis.

The drop in the UK and Ireland compares with a fourth quarter decline of 2.5 per cent and analysts’ consensus expectations of a fall of 10 per cent.

First quarter like-for-like sales at Castorama France fell 0.8 per cent and were up 2.4 per cent at Brico Depot France stores, versus rises of 2.9 per cent and 5.7 per cent respectively in the previous quarter.

Many European retailers are suffering as disposable incomes are squeezed by rising prices, muted wages growth and government austerity measures, and as shoppers fret over the implications of the euro zone debt crisis.

Kingfisher has generally performed better than most, offsetting weak demand in many of its markets with a drive to improve profitability by buying more goods centrally, and directly, from cheaper manufacturing centres like China.

In March the firm posted a 20 per cent rise in 2011/12 profit.