Kingfisher benefits from the windfall factor

Kingfisher, the retail group, has reported a surge in profits as its Comet and B&Q stores reap the benefits of the building society windfalls, reports Nigel Cope, City Correspondent.
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Kingfisher's chief executive, Sir Geoff Mulcahy, said the group had re-established its pattern of sustained growth which was derailed by a shock profits warning in 1995. The company's 36 per cent increase in half-year profits to pounds 150m was ahead of analysts' forecasts and boosted by strong performances from B&Q and Comet. Group like-for-like sales rose by 8 per cent across the group. The shares rose 13.5p to a new high of 795.5p.

Sir Geoff said: "We are seeing improved consumer confidence but people are still pretty cautious about what they spend. It is not an Eighties- style boom."

He admitted the figures had been boosted by the windfall factor but said this money was "rapidly blowing through".

"It's not wonderland. But we are doing the simple things right, listening to our customers and improving all the time."

Sir Geoff said Kingfisher was looking for additional sites for its Woolworths and Comet chains. Though Kingfisher backed away from buying the whole of Littlewoods' high street stores because it felt the price was too high, Sir Geoff said he was still interested in picking up additional high street space from retailers such as Littlewoods and WH Smith.

B&Q was the star performer with profits up from pounds 47m to pounds 72.2m in the half. B&Q increased its market share from 17 to 18 per cent over the year. Woolworths, whose profit almost doubled to pounds 10m, is testing a Football World section in one branch. It sells replica football kits but has had problems securing adequate supplies. Comet also did well, turning round a pounds 3m loss in the equivalent period last year to a pounds 2.6m profit.