KINGFISHER, the company behind DIY chains B&Q, Screwfix and Castorama, yesterday posted its first fall in profits in five years, blaming last summer’s extreme wet weather, which swept across all of Europe.
Chief executive Ian Cheshire painted a similarly gloomy picture for this Easter weekend, due to the snow and freezing temperatures.
He said in early Spring “people come out and see what needs to be done” and warned that “some of those sales you don’t get back”.
The FTSE group reported adjusted pre-tax profits of £715m for the year to 2 February, in line with analyst forecasts but down 11.4 per cent on last year – its first fall since 2007.
Adverse foreign exchange movements wiped £39m off profit while the weather cost £25m as customers put off visiting stores.
The group, however, said it had moved into a net cash position of £38m compared to a debt of £88m and that “self-help” measures had helped to stem further profit decline.
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Analyst Views | What was your interpretation of Kingfisher's results?
CAROLINE GULLIVER - ESPIRITO SANTO
"Kingfisher’s shares rose 1.6 per cent in the past three months but underperformed the sector...on a positive note we think there are a few signs of improvement in the UK housing market...assuming the weather improves ... we are comfortable with our forecast for a 10 per cent profit rise in 2013-14 ."
PHILIP DORGAN - PANMURE GORDON
"Kingfisher’s profits are in line with expectations, but cash flow is stronger. We are not changing our forecasts and we think that the figures will be well taken by the market. Our buy recommendation looks to the long term drivers of scale and self-help, including increased common and direct sourcing."
RICHARD HUNTER - HARGREAVES LANSDOWN
"Investors are choosing to give Kingfisher the benefit of the doubt despite a sluggish set of results...The decline in profits was expected and the figure’s in line with estimates...Kingfisher historically has a good track record and is well positioned in its chosen markets to benefit from any economic recovery."