Kingfisher paints gloomy picture for B&Q chain |
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Published
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Thu, 16 Feb 2006 17:05
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LONDON: Kingfisher Plc., Europe's largest home improvements store, admitted substantial margin erosion in its B&Q do-it-yourself chain during the fourth quarter and blamed a weakening U.K. market and tough price competition for this show. It told investors not to expect any pick-up in the immediate future.
Kingfisher also revealed a weaker-than-expected performance from its Brico depots in France.
The company said like-for-like sales for the quarter at the 335-store B&Q fell 9 per cent against an 8.4 per cent drop in the third quarter. The sales slumped in spite of a series of discount sales. Total sales fell 6.1 per cent to 850.3 million pounds.
Chief executive Gerry Murphy said the U.K. home improvement market remains depressed and price competitive.
Kingfisher's overall group retail sales in the fourth quarter rose 5.6 per cent to 1.86 billion pounds, but these were down 0.5 per cent on a like-for-like basis.
Like-for-like sales at the 64-store Brico Depot chain in France were up 2.6 per cent, while the 101-store Castorama chain in France saw like-for-likes increase 2.4 per cent. Rest of Europe like-for-likes increased 18.8 per cent, while in Asia the increase was 8.2 per cent.
Kingfisher, which doesn't report net income on a quarterly basis, said it expects its full-year pre-exceptional profit before tax to be in line with market prediction, which is at 445 million pounds. Its year-end net debt is expected to be under 1.4 billion pounds, better than market forecasts.
The company will announce its full-year results on 21 March.
The company has changed the B&Q management team. It has also closed down 22 stores and plans to shut down another 16. It has already reduced 400 head office jobs.
Kingfisher shares were down 4-3/4 pence at 223, valuing the business at 5.25 billion pounds.
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Retail firm B&Q to cut 400 jobs at HQ 