views

Kingfisher says profits will survive the impact of the winter’s big freeze

B&Q owner Kingfisher said it had defied the big freeze in posting better-than-expected results for January.

The company said it had kept a lid on costs and profits would be “slightly ahead” of the £540m for the year to 30 January pencilled in by city analysts

Like-for-like sales for the final quarter at B&Q had been “slightly up” but snow storms meant sales were down 3.5 per cent in the 13 weeks to 30 January.

B&Q previously benefited from a 5.7 per cent rise in like-for-like sales during the quarter to 31 October with higher sales of “big ticket” items and renewed DIY interest as customers opted to “improve, not move”.

Despite the sales fall, B&Q’s margins were boosted by fewer price cuts, supply chain savings and stronger sales of higher-margin goods.

Chief executive Ian Cheshire said underlying sales trends remained “relatively resilient” over the period although the UK and Poland were worst-hit by the poor weather. Analysts at Credit Suisse said of the result: “While investors have been fairly unforgiving on companies reporting weak sales even if accompanied by good margin performance we believe that Kingfisher should be treated more sympathetically given the progress it has made in 2009/10 and that it has now reached a position where it can develop and reveal its medium term strategy from a position of relative strength.”

Comparative sales across the overall group were down three per cent for the quarter, as Kingfisher also registered a 4.6 per cent like-for-like sales decline in France. For the year as a whole, Kingfisher registered total sales of £10.5bn.