Swinging from the coldest March for 50 years to the hottest July since 2006, Ian Cheshire, chief executive of B&Q owner Kingfisher, could not resist calling the first six months of its financial year “a game of two quarters.”
He said: “It is highly unusual to see quite such extremes of weather so close together. I’m actually rather pleased that we made a good recovery in the second quarter. We have moved into the much less weather-sensitive second half.”
Headline pre-tax profits dipped 1.6 per cent to £365 million in the six months to August 3 on sales 4.3 per cent higher at £5.7 billion.
The first-half dividend is tweaked up by 1 per cent to 3.12p. But the shares today dropped 9p to 411p, largely on the cautious outlook expressed by Europe’s biggest DIY group.
Cheshire said: “In the UK, we are seeing some clear forward-looking indicators showing a tick-up, and the housing market is improving. But real wages are still falling and consumer sentiment has yet to feed through to our sales. In France, things are on a very different trajectory and the DIY market is still falling.”
B&Q’s extremes of weather saw sales of winter fuel in the first quarter jump by 66 per cent while in the second quarter it was charcoal up 48 per cent, barbecues up 26 per cent and watering cans and hoses ahead by 69 per cent.
“It was almost as if people had not actually been into their gardens for three years,” said Cheshire. “Sales of outdoor products were down 11 per cent in the first quarter and up 17 per cent in the second.” Overall B&Q’s sales were down 1.7 per cent for the half year.
At trade-counter business Screwfix, sales advanced 14 per cent in a “challenging tradesmen market”, which is estimated to be down 1 per cent.
Cheshire said the chain had benefited from longer opening hours, and he is planning to increase the number of openings for the year from 50 to 60.
Screwfix is also making its first step on to the Continent. It will open four stores in a so far unnamed German city next year. Cheshire said: “We are pretty confident that Screwfix can work in other countries, and Germany is the largest DIY market in Europe.”
Kingfisher has won a long-running dispute with the French tax authorities over the demerger of its electrical retailer Kesa 10 years ago. It has written £145 million on to its balance sheet. That helped to boost the cash on Kingfisher’s books from £29 million to £259 million by the end of the half year.