Kingfisher to reap cost-cutting rewards

Analysts expect the group, which also runs the Castorama and Brico Dpt chains in France, to report profits of 145million for the quarter to April, up 13 per cent on the same period last year.

Sales at B&Q stores open at least a year are tipped to fall by between 1.3 per cent and 3.2 per cent due to the impact of the poor weather and comparisons with a warm spring during the same period last time.

However, analysts expect gross profit margins to continue benefiting from Kingfisher's efficiency push, which includes buying more products from cheaper manufacturing centres such as Asia.

The group, which has 830 stores in eight countries, should see reduced losses at its Chinese business, where it has been closing or downsizing its worst stores and revamping the rest.

Kingfisher recently revealed the benefits of the consumer trend to "improve not move", with profits up 50 per cent to 547m in the year to 30 January. Its UK arm, which includes Screwfix, saw profits soar 64.5 per cent thanks to an impressive performance from B&Q.

But the results were overshadowed by Kingfisher's outlook comments, with the group saying it remained cautious on future prospects for consumer demand across Europe.

Kate Calvert at Shore Capital is forecasting first quarter B&Q same-store sales to be down 3 per cent on a year earlier.

Kingfisher has nearly 120 large B&Q stores and 211 medium B&Q outlets in the UK and Ireland.

Fashion chain New Look, which abandoned plans to float in February due to volatile market conditions, is expected to announce increased full-year profits on Wednesday. It is expected to see earnings before interest, tax, depreciation and amortisation, of about 249m for the year ended March 31, up from 217.6m the year before.