Buoyant Kingfisher to spread wings

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The Independent Online
Kingfisher, the Woolworths and B&Q retailer, reported record sales and profits yesterday as it unveiled plans to expand its overseas interests.

Strong performances from Woolworths, B&Q and Comet helped Kingfisher to a 25 per cent increase in pre-tax profits to pounds 388m last year. However, profits at Darty, the French electrical retailer, were held back by a weak French market and the strength of sterling.

In spite of the record performance, Kingfisher chairman Sir Geoff Mulcahy expressed caution about the prospects for this year. "We expect competition to be intense and to see low growth both here and in France," he said.

Kingfisher said its trading since 1 February had been encouraging but declined to give a figure on like-for-like sales growth. This prompted some analysts to express caution about prospects for this year. "It will be a more difficult year especially in France, which accounts for 30 per cent of Kingfisher's profits," said John Richard at NatWest Securities.

Kingfisher has opened its first store in Asia with a branch of B&Q in Taiwan. It says the store is trading well and a further two will open this year. The group said it was possible that its other formats such as Superdrug and Comet could open in Taiwan and other Asian markets. Kingfisher is also considering expanding into emerging markets in Europe to complement its interests in France.

Sir Geoff Mulcahy, chairman, did not rule out acquisitions to boost Kingfisher's expansion but declined to comment on speculation linking the group with the Littlewoods high street stores recently put up for sale, or the Wickes DIY business.

It is expected that Kingfisher will examine the Littlewoods documents compiled by BZW. While some of the sites would be suitable for branches of Woolworths, it is thought unlikely that Kingfisher would be interested in bidding for the whole chain.

Kingfisher's group sales were 10 per cent ahead last year at pounds 5.8bn. Like-for-like sales across the group were 7.4 per cent.

Kingfisher shares closed 22.5p higher at 697p.

Investment column, page 22