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Kingfisher Q3 trading update

Published: 2 December 2010
B&Q parent company issues its third quarter trading update this morning, relating to the 13 weeks to October 13.
Kingfisher Q3 trading update
The figures show that the UK and Ireland was the only region to see a sales drop in the quarter. Total sales in the UK and Ireland for the 13 weeks were £1,051m, a like-for-like sales decline of 4.2% in constant currency. This is compared with a 1.8% increase in France and a 1.1% decline in the group's other international businesses. It means like-for-like sales for the group declined 1.2% in constant currency.

Figures for B&Q are broadly in line with the group performance. B&Q UK & Ireland's like-for-like total sales were down 5.1% to £924 million compared with "a very strong Q3 last year which was boosted by a successful programme to clear stocks held at the top of in-store shelving".

All categories saw similar sales declines, said B&Q, "reflecting the lower footfall, in part offset by higher Average Transaction Value". Kitchesn were the exception, with gross sales up 13% thanks to "improved merchandising, new ranges and more targeted promotions in the quarter ". However, the majority of these will be delivered, and therefore accounted for, in the fourth quarter.

Retail profit declined from £43m in Q3 2009, to £38m, despite a gross margin percentage gain of 110 basis points, achieved, said said B&Q by "more direct sourcing and further shrinkage reduction.

"A strong focus on operating cost efficiencies also continued despite increasing marketing spend to support the national roll out of TradePoint into B&Q large stores and the launch of the 'Making it Easier' marketing campaign towards the end of Q3."

Trade Point "continues to progress well" said the company, while Screwfix total sales grew 4.1% to £127m "boosted by new ranges and the addition of specialist trade desks exclusive to plumbers and electricians within Screwfix outlets."

Commenting on the results, group chief executive Ian Cheshire said: "This quarter is significant for our overall annual profitability and I am pleased that our well established programme of self-help initiatives continued to deliver another solid performance. In particular, our businesses outside the UK performed strongly, accounting for 80% of the quarter's profit.

"In the UK & Ireland, where we were trading against tough comparatives, we were able to maintain our profit for the quarter despite on-going tough trading conditions and continued investment in developing both our consumer and trade offers. Right across the Group our sourcing initiatives and scale are increasingly being brought to bear to improve our customer offer and enhance our profitability.

"We enter our fourth quarter in good shape and with our Delivering Value plans remaining on track. We are well prepared to trade effectively in these challenging times and we continue to lay solid foundations for sales and profit growth in the future."

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