Kingfisher knocks up 13% higher Q3 profits

It's not all doom and gloom in the retail sector. The B&Q owner is positively glowing.

by Emma Haslett
Last Updated: 06 Nov 2012
It may have been a tough few months for retailers, but in the DIY sector, it’s been a tale of two, er, companies: because while Focus DIY fell by the wayside earlier this year, for Kingfisher, which owns B&Q and Screwfix, 2011 has been surprisingly positive. The company published encouraging third-quarter results this morning, showing that profits increased by 13% in the three months to the end of October, with its French division showing the strongest performance. And there we were thinking no one across the channel could afford their daily pain, let alone a new bathroom…
In fact, le division Francais (as we imagine it’s referred to chez Kingfisher), saw sales rise by 2.9%, to nearly £1.2bn. And while sales in the UK still rose, they couldn’t quite keep up: they went up by 1.2%, hitting just over £1bn. That meant its international division was Kingfisher’s fastest-growing arm: it grew by 9.5% to £559m  pushing overall retail profit up by 13.1%, to £273m. Kingfisher added that the third quarter is usually ‘its most significant trading period’ of the year – presumably because consumers want to get their houses in order (as it were) before Christmas.
All of this throws the plight of Focus DIY into sharp relief. Kingfisher bought 27 of Focus’ 29 defunct stores when it entered administration back in May, which the firm says are now ‘trading well’. What’s more, in September, it said it was planning to create 1,200 new jobs in the UK, with as many as 40 new Screwfix stores.
To be fair to Focus, its main problem was that, having lain unloved at the bottom of its private equity owners’ toybox, it piled up debts faster than Handy Andy could knock up a set of MDF shelves. When debt specialist Cerberus then bought it for £1 in 2007, it was probably too late. Which just goes to show how vital good management (not to mention a bit of TLC) is, particularly when a downturn bites.
Finance Retail

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