Kingfisher takes a pounding after weak French quarter

Huge problems in France

The good news was that the quarterly profit on group level rose 5.8 % to
271 million pounds (325 million euro). The total turnover was 2.921 billion pounds (3.5 billion euro), which
meant an 8 % increase. Considering like-for-like exchange rates, the impressive
numbers were not as impressive: +1.7 % profit and +4.6 % turnover (and +1.4 % on a
like-for-like basis).

Kingfisher is struggling in France, which is a serious problem as Castorama and Brico Depot
still represent 50 % of the group profit. French consumer trust “is still weak, with no obvious signs of an
imminent improvement”, says CEO Ian Cheshire. “Whilst we have delivered
sales growth in each of our geographies our markets remain challenging,
especially in France.”

The French quarterly turnover (on a like-for-like basis) remained level and profit
also remained stable at nearly 168 million euro. If exchange rate fluctuations are excluded, profit dropped 5.6 %.
In order to keep sales numbers up to par, Castorama and Brico Depot had to
resort to discounts, impacting the profit margin.

British turnover below
expectations

Kingfisher, Europe’s
largest DIY group, is not in the clear in its home territory either. The British like-for-like turnover grew only 0.4 %. B&Q, which had a management
reshuffle in October, did manage a 7.9 % increase profit-wise (to 75
million euro), but analysts had expected a 1.2 % turnover increase, triple of
what was actually achieved.

Screwfix, focusing on professionals, had an 11 % like-for-like turnover growth, thanks to “encouraging early
signs in the smaller tradesman market”. Kingfisher believes the British housing
market has passed its lowest point, now that the government has announced a
plan to support people who purchase a house.

(Translated by Gary Peeters)