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 10 May 2008 00:39 BST

DIY retailer Kingfisher profits down on restructuring costs

Thursday, 27 Mar 2008 08:23
Profits are down for B&Q owner Kingfisher
B&Q owner Kingfisher has reported a rise in sales over the last year but a 12.2 per cent drop in profits on restructuring costs in Asia and the UK.

The board has also announced it is slashing the final dividend by 50 per cent to 3.4p, making a total dividend for the year of 7.25p.

The group recorded pre-tax profit of £395 million for the year ending February 2nd 2008, compared to £450 million for last year.

Group retail sales were up eight per cent, while like-for-like sales – from stores existing last year – rose by 2.6 per cent.

Profits were hurt by a £40 million charge in Asia as the company closed B&Q Korea and sold its 50 per cent stake in B&Q Taiwan. Restructuring its B&Q China business, which was also hit by delays following new regulation, also made an impact on earnings.

In the UK, sales were boosted by a store revamp but the refurbishment pushed down overall profits.

Peter Jackson, chairman, said: "The last year has been challenging for international retailers with increased global economic uncertainty impacting consumer confidence, particularly here in the UK.

"Despite this there were many examples of good progress across the group. In our largest single business, B&Q, we made a major step forward in improving B&Q's offer to customers, introducing more new products and modernising more store space than ever before, while capitalising well on more buoyant conditions in many of our international markets."

Kingfisher said its businesses outperformed the UK home improvement market, which grew by three per cent over the year, by delivering sales growth of 5.1 per cent.

In a recent trading update, rival Homebase also confirmed a slowdown in the second half of the year. The retailer said sales were down three per cent to £715 million in the second half, as a slowing housing market and tighter household budgets took their toll.End of story

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