Kingfisher beats profit forecast with cost-cutting

 
City A.M. Reporter
Kingfisher, Europe's biggest home improvement retailer, beat first-half profit forecasts, helped by cost-cutting and business improvements that it said would help it to cope with a tough consumer outlook.

The group, which runs market leader B&Q in Britain and the Castorama and Brico Depot chains in France, said it made a profit before tax and one-off items of £354m in the 26 weeks to 31 July.

Analysts' mean forecast was £342m in a company poll.

"The immediate outlook for consumer spending is fragile, particularly in the UK where it is likely to remain challenging for some time," said chief executive Ian Cheshire.

"Our continued profit growth will come from our well-established self-help initiatives."

Britain's retailers are battling to emerge from a long and deep recession and fear steps to rein in government borrowing, like higher taxes and public spending cuts, could hit demand in the months ahead.

Kingfisher, which runs over 830 stores in eight countries, reported a 1.3 per cent fall in first-half underlying sales in July, hit by a particularly weak performance in Britain.