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.Reuse content