Return of DIY boosts Kingfisher's profit

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The Independent Online

The downturn in the housing market has reignited interest in DIY among the British public, pushing up sales at Kingfisher, the home-improvement group that owns B&Q.

But consumer confidence is still uncertain and the group's outlook for the coming year remains muted.

B&Q's sales of wallpaper alone shot up 12 per cent year-on-year in the third quarter, Kingfisher said yesterday. The collapse of big-ticket bathroom and kitchen shops such as MFI have also helped to boost sales of kitchens and appliances by 27 per cent compared with 2008.

Higher sales – alongside significant cost-cutting and efficiency measures – have pushed B&Q's sales up by 5.7 per cent, on a like-for-like basis. Retail profits from the 331 stores are up by 45 per cent to £43m.

"There is continued interest in the home in the UK," Ian Cheshire, the chief executive of Kingfisher, said yesterday. "People are using the home as somewhere to express themselves rather than as an investment. People are also being slightly more adventurous."

But expectations for 2010 are downbeat. "Looking ahead, we continue to rely on our own initiatives to drive performance and continue to assume no early help from improved consumer demand," Mr Cheshire said. "Unemployment and tax are still weighing heavily on people's minds, despite the slight improvements in the housing market."

Although some 80 per cent of Kingfisher's group profits come from businesses abroad – particularly in Poland and France – B&Q's strong quarterly performance was a key factor in estimate-beating overall profits going up by 28 per cent to £227m on revenues up by 2.4 per cent to £2.69bn. But another of Kingfisher's UK businesses, the DIY wholesaler Screwfix, is performing less well, with sales down by 3.8 per cent.

The group's Chinese operation is making significant progress. It recorded losses of £7m over the quarter, less than half the £17m loss recorded last year at the height of the downturn in China's property market. Some 18 stores have been closed this year so far, and the business diversified, as part of plans to return to profit by 2011.

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