Market Report: Kingfisher falls back as B&Q worries build up

Kingfisher closed at its lowest price since December last night thanks to fears over the challenges facing its flagship B&Q chain.

The home improvement group slid back over 4 per cent as Société Générale downgraded its rating to "sell", with the broker saying that "more severe consumer headwinds" means it is "time to worry about B&Q in the UK".

Pointing out that "total sales, and more importantly, sales density, have been in decline since 2005", SocGen's analyst John Baillie predicted that the DIY chain's retail profits will fall nearly 15 per cent over the next two years.

Giving one of the reasons for his pessimism as the link between B&Q and the property market, he added that the "current trends and outlook for the housing market in 2011 and 2012 are not good; falling activity and falling prices make an unpleasant cocktail for the home improvement sector and for the UK market leader, B&Q, inparticular".

On the group generally, he said, "more challenging times lie ahead in terms of delivering growth post the recovery phase, as this will be based on international expansion". He added that many countries "are not ready for the group's retail home improvement model".

As a result Kingfisher slipped back 11.4p to 243p, but it was by no means the only retailer struggling. Marks & Spencer and Next dropped 6.6p to 339.8p and 36p to 1,940p respectively, although Associated British Foods rallied 26.5p to 993p following its fall on Monday. Meanwhile HMV reached a new all-time low of 16.25p after shedding 4.5p as it announced not only its second profit warning of 2011 but also the departure of its chairman Robert Swannell. Despite a positive start to the day, the FTSE 100 finished 58.25 points behind at 5,935.76 following comments from the US Federal Reserve chairman Ben Bernanke on the effect of high oil prices on the country's economy and continuing fears over unrest in the Middle East and North Africa.The miners also failed to hang on to early gains, with Fresnillo – up 2p to 1,596p – managing just a tiny rise despite the Mexican silver miner's full-year pretax profit more than doubling to £1bn.

Capita was the top tier index's biggest gainer as it moved up 37.5p to 763p. The group revealed it was discussing a potential contract extension with Zurich Financial Services, which market voices said raised hopes of the private sector starting to return to outsourcing.

After a big hit earlier in the week following its results, HSBC was not looking any better yesterday. Retreating 20p to 658p, Deutsche Bank and UBS removed their "buy" ratings, with the latter saying its "rampant cost growth and a resolute unwillingness to discuss revenue prospects leave us without confidence in the 2011 outlook". Barclays was also down – driven back 6.6p to 313.25p – as it announced it had agreed to buy Egg's British credit card assets. The only detail it revealed on the price was that it was "a significant discount to gross receivables", which the bank said was around £2.3bn.

The online grocer Ocado was given a major boost by Goldman Sachs upgrading its advice to "buy" from "neutral". The broker – which last month handled the sale of John Lewis's pension fund's stake in the online grocer, after which the group fell over 10 per cent – said it was now at "an attractive entry point" and "well placed to deliver strong growth", as it gained 12.3p to 213.3p.

The second line's biggest riser was Centamin Egypt, advancing 9.7p to 128.2p after a severe drop on Monday thanks to fears that it could be banned from exporting gold. As well as arebound from that fall – plus an increase in the yellow metal's price – traders also noted the Canadian company Nuinsco had said it had seen positive results from samples taken from areas in Egypt near Centamin's Sukari mine.

Back on the top-tier index, Tesco was down 3.65p to 400.55p on Sir Terry Leahy's final formal day as CEO of the supermarket giant; Shore Capital described the appointment of Philip Clarke as his replacement as "timely" and said it "bodes well for investors in the retailer".

GKN declined 8.4p to 201.5p following its final results, despite revealing pretax profits of £363m – over four times 2009's total. However, its fellow plane parts manufacturer Meggitt jumped up 13.5p to 351.7p as it made bullish comments over its outlook.

The small-cap outsourcer Xchanging was left 0.5p weaker at 55.5p after its executive chairman, Nigel Rich, prepared shareholders for "a year of transition as we address and resolve clearly defined problems." The group, whose chief executive and founder DavidAndrews left last month, made a statutory loss in 2010 of over £55m.

Meanwhile, on the fledgling index Superglass Holdings was knocked back 6.5p to 27p – a fall of nearly 20 per cent – after issuing a profit warning. The company, which makes insulation products, said it had not got as many sales as it had hoped from the Government's Carbon Emission Reduction Target (CERT) scheme.

Actor Burt Reynolds last year
peopleBurt Reynolds, once among the most bankable actors in Hollywood, is set to auction his memorabilia
Gordon and Tana Ramsay arrive at the High Court, London
newsTV chef gives evidence against his father-in-law in court case

Watch the spoof Thanksgiving segment filmed for Live!
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
i100 Charity collates series of videos that show acts of kindness to animals
Arts and Entertainment
One of the installations in the Reiner Ruthenbeck exhibition at the Serpentine Gallery
artCritics defend Reiner Ruthenbeck's 'Overturned Furniture'
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game