Mulcahy talks tough with B&Q boss

Sir Geoff Mulcahy, chief executive of Kingfisher, yesterday backed the management of the group's B&Q DIY subsidiary despite a 33 per cent slump in the division's profits.

The pledge confused many in the City as earlier suggestions had been that B&Q's chief executive, Jim Hodkinson, was set to leave the group after the poor performance, and a decision by Sir Geoff to rein back the expansion of the Warehouse store format that Mr Hodkinson was keen to expand.

Sir Geoff said: "Jim is at the helm and we have an agreed plan of action." He admitted that there had been some "tough talking".

At an analysts' meeting yesterday morning Sir Geoff took all questions on B&Q while Mr Hodkinson sat silent on the podium after his presentation. The style of the briefing conveyed the impression that Sir Geoff was exerting a stronger control over the operating businesses.

In spite of the company's statements on management, analysts and institutional investors are still uncertain how long the entrepreneurial Mr Hodkinson will want to remain at B&Q. One fund manager said: "It looks a bit sloppy if they can't make their mind up. I suspect that his [Mr Hodkinson's] ambitions are not being matched by what Kingfisher is trying to do."

The group had intended to open nine of its huge Warehouse stores this year but will now open only four. The Warehouse stores show comparative sales growth of 9.4 per cent. But sales have declined 1.2 per cent at the standard-size stores.Group profits were down from pounds 83m to pounds 55m last year though sales grew 5 per cent to pounds 1.3bn.

Kingfisher announced flat pre-tax profits for the year to 3 February. Pre-tax profits, excluding exceptional items, rose 2 per cent to pounds 287m. Total profit rose to pounds 311m, including the sale by Darty, the French electricals business, of a subsidiary.

Star performer was Woolworths where profits rose 27 per cent to pounds 65m. Comet, the electrical chain, turned last year's pounds 2m loss into a pounds 3m profit while Superdrug profits rose 8 per cent to pounds 41m. The Darty electrical chain in France was held back by a weaker French economy.

Comment, page 23

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