Kingfisher overcomes sales drop at B&Q

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Profits at B&Q owner Kingfisher are set to rise 20 per cent despite the DIY chain suffering a drop in sales of home improvement and heating products.

The group, which has 360 B&Q stores in the UK and Ireland, said like-for-like sales at the chain fell 2.5 per cent in the 13 weeks to January 28, worse than City forecasts for a 2 per cent decline and down from 0.9 per cent the previous quarter.

The mild autumn weather meant a 50 per cent surge in sales of lawnmowers and barbecues but this was offset by lower demand for heating products and a 5 per cent fall in sales across its indoor range. It benefited from the closure of rival Focus DIY earlier in the year, having bought 29 of its stores.

The company expects profits for the year to the end of January will be in line with City hopes for a 20 per cent rise to £799m, helped by strong sales growth at its overseas division, which includes Castorama and Brico Depot.

Sales in France were up 3.7 per cent on a like-for-like basis at £4.5bn across the year, compared with a 1.4 per cent drop to £4.4bn in the UK and Ireland.

The picture was brighter at its Screwfix chain, which recently opened its 200th store, and enjoyed a 2.2 per cent increase in like-for-like sales in the quarter as it rolled out specialist trade desks for plumbers and electric- ians.

Freddie George, a retail analyst at Seymour Pierce stockbrokers, said unemployment and declining house prices in the UK and the impact of austerity measures in France were a threat to the group.