Kingfisher reports 45.4 percent slump in Q1 profits |
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Wed, 24 May 2006 11:15
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LONDON - DIY retailer Kingfisher PLC today reported a 45.4 percent decrease in first quarter profit due to the prevailing tough conditions at its B&Q chain in the UK. Total like-for-like sales were also down by 2 percent.
Kingfisher said that the retail profits for the first quarter dipped to £68 million from £125 million reported at the same time last year. This figure was based on the sales that increased £2 billion from £1.9 billion reported previously. Internationally the performance of the chain was very good, but a like-for-like sales dip of 6.8 percent in the UK, which saw profits slump by 70 percent, was responsible for negating any benefits.
"Overall, the UK market remains very promotional and weather sensitive and it is not clear that stronger holiday sales represent an underlying recovery in demand,” a statement issued by the group said. “However, B&Q made further progress with its programme to improve customer service, product choice, value for money and store environment."
Trading conditions in the UK home improvement market continued to be tough as the group saw sales drop by 7.7 percent. Sales were particularly bad in the first two months due to the cold weather. "Kingfisher's first quarter again featured solid international performances and a very weak UK market," said group Chief Executive Gerry Murphy. "The first two months of the quarter were particularly weak as persistent cold weather in Europe delayed the start of the key garden and outdoor season and a major fire temporarily disrupted B&Q's kitchen deliveries."
However Castorama and Brico Depot in France reported a 1.7 percent increase in sales, while Asia reported 11.8 percent increase. The rest of Europe also had strong sales with a 10.2 percent rise. "Sales over the Easter and Bank Holiday period were stronger. The UK market remains very promotional and weather sensitive and it is not clear that stronger holiday sales represent an underlying recovery in demand," the group said.
Kingfisher shares closed at 231¼ pence on Tuesday.
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