Kingfisher flies high with profits rise

B&Q owner Kingfisher turned over £10.8bn last year with pre-tax profits up 19% to £797m. DIY is definitely back in vogue.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
Eurozone crisis? What eurozone crisis. Despite the financial gloom across many of its key territories, the DIY giant, which owns Screwfix in the UK, Castorama and Brico Depot in France, and B&Q stores all over the world, has made a decent profit, widened margins and boosted sales in 2011.

The biggest growth driver last year was France. Retail profits there are up 20% to £423m, driven – says the company - by incredible sales growth. Perhaps Sarkozy’s saving some cash by doing up one of his mansions on his tod? MT struggles to picture the French premier with a Black & Decker drill…

Other international markets were also in the mood for a spot of home improvement. Retail profits across Poland, Turkey, Germany and Russia are up 13.2% to £188m. Ian Cheshire's new 'bottom-up' strategy – taking views from across the organisation rather than from the top few layers - seems to be paying dividends.

But Kingfisher growth has not been consistent across the board. In China, Kingfisher is still making losses while it attempts to oust local players. And its sales growth in the UK and Ireland has almost flat-lined with a miniature 0.1% increase to £4.3bn. Profits in this neck of the woods, however, are up by 11.6% to £271m. Small fry given the size of Kingfisher’s revenues, but enough to fund a massive expansion at its Screwfix chain; Kingfisher opened 53 shops last year - twice as many as planned.

And it’s not the only retailer making a few bob on this little island. Fashion chain Next has seen a 5% rise in underlying profit too: it made £570m for the year to January.

Of course, it helps that Kingfisher is Europe’s biggest home improvement retailer. A hefty chunk of market share really helps in a downturn, especially when your smaller rivals start disappearing into financial oblivion. Shares in the company have surged by 23% over the past three months to 296p, proving there’s life in the retail sector yet. Good news, given today’s lacklustre retail figures from the ONS…

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