B&Q profit slides, pulls down Kingfisher group of companies

B&Q profit slides, pulls down Kingfisher group of companies

	Published : Wed, 30 Nov 2005 14:05 By : Cedric Benson Print this Story

LONDON: Home improvement retailer Kingfisher Plc. has reported a 21.4 per cent fall in its third quarter retail profit at 157.1 million pounds, mostly on account of a substantial fall in profits in its British retail unit B&Q. The group's retail sales went up 6.8 per cent to 2.07 billion pounds while sales on a like-for-like basis, went down 0.3 per cent.

Analysts had predicted profits in the range of 138 million-61 million pounds.

The company said B&Q's retail profit had come down 53 per cent for the period to 50.3 million pounds on sales, which were down 3.9 per cent.

Chief executive Gerry Murphy said the continued weakening of the retail segment in the U.K. had impacted B&Q sales and profits. He said specific action has been initiated to support sales and manage costs in the unit.

Murphy said outside of the U.K., where the group has almost half its sales, the third quarter sales went up 15 per cent and profits 9 per cent.

The company had changed its strategy in the U.K., focusing on higher volume from existing stores. It has also lowered its prices and targeted female shoppers with more number of products. It is closing down stores and converting some warehouses into a new mini format, releasing space, which will be rented out. The company has also come out with a new trading project -- the Screwfix Trade Counters and a new Trade Depots -- targeting a possible 50-billion-pound trade and building materials market.

The group, which owns the No 1 French chain Castorama, said the French unit had its like-for-like sales up 3.7 per cent and retail profit up 14.2 per cent at 46.7 million pounds.

The group has said it is investing heavily abroad and shrinking U.K. operations and extending into product areas like electricals.

Murphy said B&Q will not make a loss in the fourth quarter despite a 53 per cent fall in third quarter retail profit. The group also operates in China, Taiwan, Italy and Poland.