Kingfisher's flying high abroad

Kingfisher, owner of the B&Q chain, has seen 80 per cent of its profits generated overseas in the last quarter after a further deterioration in sales at its main UK business.

B&Q, which operates 330 stores in the UK and Ireland, saw like-for-like sales drop 5.1 per cent in the third quarter to 30 October, compared with 3.7 per cent reported at the half-year stage, due to lower footfall and tougher comparisons with a year earlier.

Profits across Kingfisher's UK and Ireland division, which also includes building supplies arm Screwfix, were flat at 46 million after the company managed to offset the sales fall by protecting margins through better product sourcing and cost efficiencies.

There was better news for Kingfisher from its Castorama and Brico Depot operation in France, where they outperformed the wider market to increase like-for-like sales by 1.8 per cent and deliver a third-quarter profits rise of 3.1 per cent to 130m.

Castorama grew like-for-like sales by 4 per cent after benefiting from a store modernisation programme and a "Do-it-Smart" marketing campaign.

Kingfisher's international sales, including operations in Spain, Russia, China, Poland and Turkey, were down 1.1 per cent on a like-for-like basis but with profits up 18 per cent to 64m. Across the group, profits were up 8.2 per cent on a year earlier to 240m during the quarter.

Stockbroker Seymour Pierce said the result matched its forecast, albeit with France slightly ahead of expectations and the UK division behind hopes.

In the UK business, Kingfisher said kitchen sales responded well to improved merchandising, new ranges and more targeted promotions in the quarter, with gross sales ahead 13 per cent.