B&Q-owner Kingfisher cashes in on the heatwave
Shares hit 12-year high as the hot spell sees B&Q's sales of goods such as barbecues rocket
B&Q-owner Kingfisher will this week reveal that demand for garden furniture, barbecues and water sprinklers has soared during the heatwave, pushing its UK sales back to growth.
The hot spell and a mini-revival in the British housing market have also seen investors warm to Kingfisher, which saw shares hit a 12-year high last week.
On Wednesday, Kingfisher UK, which also includes the trade format Screwfix, is expected to post underlying sales growth of 2.1 per cent over the 10 weeks to 13 July, according to Nomura.
Underlying sales are those in stores that have been open at least one year. This follows a torrid first quarter, when the wettest March in 50 years dragged down its UK revenue by 4.7 per cent.
Sales of hosepipes, plants, garden tables, air conditioners and fans are thought to have rocketed at B&Q since the mercury started to rise this month, compared with last summer's washout.
Nomura's Sunita Entwisle has pencilled in a 15 per cent leap in operating profit to £278m at Kingfisher in its second quarter. She forecasts the DIY group, which has more than 1,000 shops in eight countries from France to China, will have grown its sales by 1.2 per cent.
Shareholders have piled back into Kingfisher over recent weeks, believing that B&Q will be boosted by consumers spending more on their homes, as rising confidence and government initiatives lead to a nascent recovery in the housing market. In particular, the coalition's Help to Buy scheme – a £5.4bn loans and guarantees package announced in March's Budget which lends buyers up to 20 per cent of the value of a new-build home – has given the residential property sector a shot in the arm.
Ms Entwisle said: "We have now become bullish on the British economy and the benefits that a recovering housing marketing should provide to UK retailers."
In a busy week ahead of the start of the summer holidays, several of the biggest names in British business are updating the market. Many traders will have their eyes on mining giant Anglo American, where the new chief executive, Mark Cutifani, hosts his first half-year results since taking over from Cynthia Carroll.
They will be hoping for the results of a comprehensive review of a group that produces iron ore, copper, diamonds and platinum.
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