B&Q sales boom boosts Kingfisher profits

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The Independent Online

The retail group Kingfisher today swept aside fears of a slowdown in the DIY market by reporting a 6 per cent hike in sales at its B&Q chain.

Kingfisher said poor summer weather dampened sales of seasonal ranges such as garden furniture, but demand for kitchens and bathrooms meant it was able to capture further market share.

Profits improved 18.4 per cent to £345.9 million during the six months to July 31 from £292.2 million a year ago - in line with the expectations of analysts.

This improvement followed higher sales, cost cuts, better buying arrangements, international sourcing and the development of its own range of products.

In the UK, which accounts for 58 per cent of group sales, Kingfisher said the repair and home improvement market was estimated to have grown by 3 per cent in the period.

Higher demand for joinery and electrical goods - coupled with the strong performance of its showroom ranges - meant B&Q was able to counter the impact of discounts offered by rival DIY retailers.

Sales at B&Q were 6 per cent ahead at £2.17 billion and up by 2.5 per cent after stripping out the impact of new stores, including B&Q's largest UK outlet at Trafford Park, Manchester.

Analysts had expressed fears that the DIY market would suffer in the wake of five interest rate hikes since November as households tightened budgets. These concerns appeared to have been crystallised in a profits warning from home furnishings retailer MFI last week.

However, chief executive Gerry Murphy said markets for home improvements were "dynamic and competitive", although more than 60 per cent of sales growth was now taking place outside the UK.

Kingfisher employs more than 28,500 staff in the UK and Ireland, including at its Screwfix Direct stores. It manages a total of 579 stores in nine countries in Europe and Asia, while a strategic alliance with German DIY retailer Hornbach gives it an additional 110 stores.

The French businesses, Brico Depot and Castorama, delivered combined sales growth of 9.7 per cent on a like-for-like basis.

In June, the group announced plans to open its first stores in Russia under the Castorama brand to take advantage of the DIY boom taking place there.