Warm weather boosts DIY chain
Consumer demand for outdoor products in the warm spring weather helped DIY chain B&Q double its first quarter profits, the firm revealed today.
B&Q parent Kingfisher - the world's third largest home improvement business - said retail profits for the UK arm of the chain rose to £58 million in the 13 weeks to May 2, from £29 million in the same period last year.
Sales of outdoor items soared 30 per cent in the quarter, while bathroom and bedroom sales were slightly up, pushed higher by new ranges and the withdrawal of competitors from the market.
Overall UK profits - which includes results for Screwfix - were up 89.2 per cent to £61 million in the quarter.
Kingfisher said profits were driven by higher sales, margin and cost improvements.
Kingfisher said global group profits were up 38.5 per cent at £128 million, helped by the B&Q result, but like-for-like sales were 1.7 per cent down, driven by drops in performance in France and China.
Ian Cheshire, group chief executive, said: "We have made a good start to the year, boosted by better weather and a later Easter.
"B&Q in particular capitalised well on this increased demand, growing its market share and doubling its retail profit."
But he expressed caution over the outlook for the rest of the year.
"Looking ahead, we are unlikely to see a weather-driven seasonal bounce in demand again in 2009 and we continue to plan for a particularly tough balance of the year in our major markets," he said.
"As a strong business with tight control over margins, costs and cash, we are increasingly better placed to benefit when consumer demand improves."
B&Q like-for-like sales grew 3.2 per cent in the quarter, with outdoor products attracting the most attention.
The firm said sales of its metal garden furniture sets were up 107 per cent, charcoal barbecues were 148 per cent higher and vegetable seeds saw a 43 per cent uplift as people took to their gardens in the warm weather.
Bedroom and bathroom sales increased despite weaker consumer demand for so-called big ticket items. The firm said this was partly down to the collapse of furniture giant MFI, which disappeared from high streets at the end of last year.
Sales of DIY and decorative products were down 2 per cent.
Kingfisher has embarked on a strategy of lower-cost large store revamps. By re-using existing fixtures and fittings and completing the changes quickly, B&Q has refreshed some outlets at reduced cost.
The firm said it now has 119 large stores, with 59 in the modern format and 203 medium-sized outlets, of which 172 have been modernised.
Retail analyst Matthew McEachran, of Singer Capital Markets, said B&Q had well exceeded consensus forecasts of £35 million for the quarter and had almost matched full-year expectations of £59 million already.
He said: "Although B&Q has clearly been a beneficiary of seasonal weather, we see the strategic turnaround plans as being capable of delivering more upside in the remainder of the year, including quarter two particularly in light of work on range and availability.
"The seasonal weather patterns in May also lead us to believe that B&Q has got off to a cracking start so far in the second quarter."
Kingfisher shares rose more than 7 per cent following today's figures.
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