B&Q owner Kingfisher feels the cold but holds out hope of cash return
The chief executive of the owner of the DIY chain B&Q has lamented the "depressing" wintry weather forecast for the crucial trading period of this week's bank holiday.
But Ian Cheshire yesterday warmed the cockles of shareholders' hearts by raising the prospect of returning cash to them through a special dividend or share buyback, reflecting its strong balance sheet.
He made his comments as Kingfisher, which has 1,025 stores in eight countries, posted a double-digit fall in annual profits. It was hit by last year's summer washout that badly damaged the sales of plants, barbecues and garden furniture at B&Q in the UK, as well as adverse currency movements of the euro and the Polish zloty against sterling.
The peak trading period for DIY retailers is from early April to the end of June, including the three spring bank holidays, and the recent freezing temperatures are set to last until at least Saturday. Mr Cheshire said: "We have got the same depressing forecast as you [for this bank holiday]."
He joked: "If you are a real optimist, we had the wettest summer for 100 years last year and March has been the worst for 50 years so we are clearly on an upward trajectory."
Kingfisher posted pre-tax profits down by 11.4 per cent to £715m over the year to February. Its bottom line shrank in countries including the UK, France, China and Poland but its Russian business grew sales and profits rapidly.
Kingfisher UK and Ireland, which also includes its Screwfix trade format, posted a 13.7 per cent fall in profits to £234m, following a 5.6 per cent decline in underlying sales. The world's third-biggest home improvement group, which also operates the Brico Depot and Castorama chains in France, ended the year with an increased £38m on its books, with no net debt.
Mr Cheshire said the company wanted to maintain a "healthy balance sheet, which is investment grade" but added that it was considering a "share buyback or special dividend".
The timing of discussions with investors is partly dependent on the outcome of a seven-year tax dispute with the French Government worth up to €190m (£162m), with the verdict expected later this year. Mr Cheshire said: "If you are thinking of returning a chunk of cash, it would be a bit odd to have to borrow money to pay off the taxman in France."
Kingfisher increased its full-year dividend by 7 per cent to 9.46p a share.
While B&Q stores in the UK are typically much bigger than Screwfix, its smaller trade format is on track to have more shops than the DIY market leader inside two years.
B&Q opened just one store last year to take its total to 358, and has recently signed four deals to sub-let space to other retailers. But Screwfix introduced 60 to give it 275 shops in the UK and Kingfisher plans another 50 for this year.
Following an online launch in 23 European countries, Mr Cheshire also revealed it plans to launch Screwfix stores – the brand originally started as catalogue ordering business – overseas, but remained tight-lipped on a time frame.
- 1 Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
- 2 A politically correct lefty goes to see Top Gear live – you'll probably believe what happened next
- 3 Young Preston fan has play-off hero Jermaine Beckford's shirt stolen from him at Wembley - which then appears for sale on Gumtree
- 4 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 5 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
Woman accidentally shoots herself in the head while posing for a selfie
How China's richest man Li Hejun lost $15bn in an hour - and made a fortune
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Snoop Dogg on why he doesn't regret displaying misogyny towards women
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
A nation of inequality: How the UK is failing to feed its most vulnerable people
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...