B&Q owner Kingfisher results buffeted by weak French sales

 
Rebecca Smith
Screwfix remains a bright spot for the B&Q owner
Screwfix remains a bright spot for the B&Q owner (Source: Getty)

B&Q owner Kingfisher continues to battle headaches in its French businesses, with overall like-for-like sales dipping 0.5 per cent to come in at £3bn.

Shares dipped 1.15 per cent in morning trading.

Read more: Kingfisher shares slide as second quarter sales slip

The figures

The company, which owns a host of DIY and home chain stores, had its third quarter results up to the 31 October dragged down by a 4.1 per cent drop in France to £1.2bn, with both its Castorama and Brico Depot businesses on the slide.

Screwfix continues to be a driver of growth for Kingfisher, with like-for-like sales at constant currency up 10.2 per cent, while B&Q UK & Ireland reported a 1.9 per cent dip to £875m.

The firm said it remained comfortable with full-year consensus underlying profit before tax expectations, and that it was still on track to deliver its strategic milestones for the year.

Why it's interesting

The third quarter has followed a similar path to the first half of the year, with weak French sales still plaguing Kingfisher, while it also tries to minimise disruption from its transformation plan, through which it is aiming to streamline the business.

Last month, the firm said its revamp was on track, but that it did remain cautious over the outlook in both Britain and France.

Screwfix, which Chris Beauchamp, chief market analyst at IG, has called Kingfisher's "saving grace", continued to post impressive growth, up 10.2 per cent to £399m.

Ken Odeluga, market analyst at City Index, said: "Whilst the group would have frayed more severely without the steadfast optimism of CEO Véronique Laury, her confidence has not smoothed the path towards ONE Kingfisher for the first two years, and year three is set to be just as tough.

"Additionally, UK/Ireland recovery will be tested further next year, leaving ample scope for sceptical investors to question Kingfisher’s viability as a single entity again. A 14 per cent share price decline this year reflects the realisation that there would be no quick wins for investors, even if a break-up scenario gained traction - again."

What the company said

Véronique Laury, chief executive, said:

We have seen strong growth at Screwfix and Poland offset by continued weak sales in France, alongside some business disruption from our One Kingfisher plan, principally reflecting product availability and clearance. We continue to act on the causes of this disruption, which we are confident will ease.

She added: "We remain confident in our ability to deliver our long-term plan and in the financial and customer benefits it will generate. Early customer reaction to our new ranges continues to be encouraging. We recognise that the transformation plan involves a lot of change for our colleagues and appreciate their continued hard work and expertise."

Read more: B&Q owner Kingfisher's shares jump despite profit decline

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