Ever since Kingfisher let its general retail fledglings Woolworths and Superdrug fly its conglomerate nest, the newly focused do-it-yourself retailer has been singing from an international hymn sheet.
Although its heartland remains the UK and Ireland, its shops span eight other countries around the globe, from China to Spain, and contribute 40 per cent of group sales. Underlying sales from its international businesses soared by 11.4 per cent in the three months to 1 May, way ahead of the 2.5 per cent like-for-like sales growth achieved in the UK and Ireland.
Most of its overseas stores are based in France - still its most important international market. Two years ago, it took control of its French business, Castorama, transforming Kingfisher into the world's third biggest pure DIY shopkeeper behind the US giants Home Depot and Lowes. Crucially, the deal gave the group combined buying power of some £7bn, helping it to squeeze better deals from its suppliers. It aims to save £1bn this way over the next five years. This should underpin big profit growth, even if increased competition and higher interest rates in the UK hold back the number of customers visiting its shops.
Kingfisher said yesterday that total group sales in the first quarter of its financial year rose 10 per cent to £1.9bn, or 5.8 per cent on a like-for-like basis. Its retail profit smashed City forecasts, soaring by 18 per cent to £145m. Its French businesses, which include the discount chain Brico Depot, performed particularly well, with underlying sales rising 8 per cent.
The group's shares trade on a price-earnings ratio of 16 times, putting it on a hefty premium to its UK retail peers. They have gained 10 per cent since we tipped them last September and should have further to go, particularly if one of its US rivals comes shopping for a business in the UK.