Published on 17 - September - 2009

News

A strong performance by the UK DIY chain pushes group retail profit up 23.5% for H1.


A "renewed consumer interest" in home and DIY, saw B&Q's profit jump 66% in the 26 weeks to August 1. The strong performance boosted parent company Kingfisher plc's results, pushing group retail profit up 23.5% to £347m.

UK and Ireland sales for the group increased 1.2% to £2.4bn, with retail profit up 59.3% but, with Screwfix struggling in a "challenging trade market", B&Q, along with Kingfisher's Polish business, was the star of the 26-week period.

Total sales for B&Q in the UK and Ireland saw a 2.6% increase to £2.2bn, while favourable weather boosted sales of outdoor products, which were up almost 7%. Kitchen, bathroom and bedroom sales were up around 4%, helped by recent showroom investment and competitor withdrawal.

DIY and decorative remained fairly resilient, with sales down just 2%, supported by "increasing consumer interest in DIY and low-cost room makeovers", explained the company.

B&Q product highlights for the 26 weeks included charcoal barbecues, up 69%, strawberry plants up 80%, vegetable plants up 68%, B&Q seed kits up 225% and designer wallpaper up 15%.

Kingfisher believes the consumer appetite for bigger ticket projects "remains weak", impacting directly on the UK trade sector. In what the company described as a "much more challenging" market, Screwfix reported a sales decline of 5.8% to £236m.

Seven new trade counters were opened during H1, taking the total to 145. Over half of total sales are now generated from the physical outlets. Retail profit was down 21% to £11m compared with the same period last year.

In Poland, sales were up 11.4% to £493m, with retail profit up 12.4% to £63m. B&Q China saw a sales decline of 18% to £222m, with losses of £22m, reflecting a continuing decline in the country's housing market.

Kingfisher has rationalised its store portfolio in China, closing 15 of its 63 stores and downsizing two. The group plans to close a further six stores in H2 and said it hopes to return the business to profitability by 2011.

Kingfisher group chief executive Ian Cheshire said of the results: "We have delivered a strong set of results against a generally tough economic backdrop in our major markets. We grew market share and our self help initiatives are working, particularly in the UK, where a stronger B&Q was able to capitalise on better weather and the renewed consumer interest in the home and DIY."

"Looking forward, given widespread economic uncertainty, we continue to plan for challenging times. However, we will retain flexibility in out trading plans and stay focused on our self help initiatives so that while managing the business tightly we can capitalise on better demand as it arises."

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