Kingfisher profits lift but still tough in UK

B&Q owner Kingfisher yesterday forecast a 20 per cent 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 £661m to £672m, 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 per cent in the 13 weeks to January 29, an improvement on the 5.1 per cent seen in the previous quarter when comparisons with a year earlier were tougher.

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Total sales at the UK stores were up 0.1 per cent to £835m as the disruption from the snow in December delayed the installation of kitchens but prompted a 43 per cent hike in winter fuel sales and an 11 per cent rise in demand for portable heaters.

Its building supplies arm Screwfix also put in a stronger performance, with sales up 5.4 per cent to £119m after it introduced new ranges.

Chief executive Ian Cheshire was cautious about B&Q’s outlook for the current financial year following the rise in VAT to 20 per cent. 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.