Mulcahy set to stay on at Kingfisher

Sir Geoff Mulcahy is likely to stay on at Kingfisher into the new year as the retail group seeks to ensure a smooth handover between the high street veteran and his successor as chief executive.

Francis Mackay, the group's chairman, said that he hoped to announce the new chief executive by November. However, he said Sir Geoff would not leave as soon as the new person arrives as the company is anxious not to disrupt the integration of Castorama, the French DIY group which Kingfisher has only just taken full control of.

Mr Mackay said the search for Sir Geoff's replacement was "going very well" but the company had not yet identified a preferred candidate.

The comments came as Kingfisher reported strong profit growth for the six months to 3 August but warned of slowing sales growth as Europe's economies weaken. The company, which owns B&Q in the UK and raised £2bn through a rights issue to fund the buyout of Castorama in France, said sales growth would drop from the "exceptional" growth of last year to a more typical 4 to 5 per cent.

"We are taking a prudent view of spending going forward, because of economic uncertainties and [the prospects of] war with Iraq," Sir Geoff said.

The group confirmed that its preferred option with its electricals business is to seek a float of the division on the Paris stock market by May next year. Mr Mackay said he had received "no serious approaches" for the business. He admitted that the group would need to improve its loss-making Promarkt electricals operation in Germany before the demerger took place. "We'd have to have a good retail story to tell around Promarkt and its got our full-time attention," he said. Promarkt recorded reduced losses of £21.6m in the first six months, compared with £23.4m last year.

Kingfisher reported pre-tax profits of £266.3m for the half year, compared with £80.3m a year ago when the figures were affected by exceptional items. Like-for-like sales rose by just 1.3 per cent across the group, with DIY's 2.8 per cent rise off-setting a 1.5 per cent fall in the electricals.

B&Q has increased its market share though Castorama has been underperfoming in France.

The shares fell 12.5p to 203p.