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B&Q owner Kingfisher left out in the cold

Every time blizzards sweep across the UK, consumers find it hard to get to their nearest DIY shed to buy bags of grit, shovels or a sledge for the kids.

But even if they do, they find the huge car parks far too icy and treacherous to navigate, so they don’t even get out of the car and just go home. Sales at all major DIY stores suffer as a result.

It will happen again because of heavy snow in many parts of the UK yesterday, and forecasters have warned that Arctic conditions could continue well into next week.

With that in mind – and the worse-than-expected 3.9 per cent fall in sales reported at rival Homebase over the Christmas trading period – Panmure Gordon’s retailing guru Philip Dorgan took a chainsaw to his profit forecasts for B&Q owner Kingfisher.

Describing the shares, 12.2p down at 272.9p, as ‘dead money in the short term’, he slashed his current year earnings forecast to £700m from £730m and to £726m from £759m for next year.

He believes that B&Q will have seen a continuation of declining like-for-like sales in the fourth quarter and expects a 6 per cent decline after the 4 per cent fall in the third-quarter and 2.5 per cent in the comparable period last year.

Dorgan reckons the consumer will batten down the hatches in the first few months of the year and does not expect the shares to perform until the downgrade cycle comes to an end, and this may be several months away.

Kingfisher followers were also disappointed to hear recently about the resignation of Euan Sutherland, who was viewed as a credible successor to boss Ian Cheshire. He leaves in March to become chief executive of the Co-operative Group, where he has been a non-executive director since 2010.

Source : Geoff Foster - ThisIsMoney.co.uk
www.thisismoney.co.uk/money/markets/article-2264670/MARKET-REPORT-B-Q-owner-Kingfisher-left-cold.html?ito=feeds-newsxml

19 January 2013
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