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The week ahead: Kingfisher and Topps Tiles to report

B&Q and Screwfix owner Kingfisher looks set for more disappointing quarterly figures on Thursday, with concerns growing that its poor performance could be about more than just the weather.

Sales of gardening and DIY products this year are likely to have been hit by the prolonged cold spell which extended into March. But analysts are also worried about Kingfisher's revenues being threatened by a shift from "do-it-yourself" to "do-it-for-me", while there is also concern over possible structural problems in the business.

The latest trading update, covering the period from February to April, is the first since full-year results in March showed annual profits and sales tumbling, with the fall blamed on a wet summer and weak consumer confidence.

Analysts Cantor Fitzgerald forecast operating profits down to £156 million from £160 million compared to the same period last year, with like-for-like sales off 1.2%.

This includes a weaker performance both in Britain and in Kingfisher's French businesses Castorama and Brico Depot. The looming threat of a recession in Poland could also hurt its other main market, Cantor said.

Elsewhere, Topps Tiles, the UK's largest tile and wood flooring retailer, is expected to report another dent in profits next Wednesday as it unveils half-year figures.

The group, which has 320 stores across the UK, warned earlier this year that it expected to see underlying pre-tax profits for the six months to the end of March fall to around £4.3 million, compared with £5.6 million for the same period last year. It said like-for-like revenues were expected to have fallen by 0.3%.

The company said it was facing weaker-than-expected demand but that cost-cutting initiatives would help it meet full-year profit forecasts of £13.3 million to £13.8 million.

The annual figure fell to £12.8 million last year, blamed on the stagnating economy and low level of housing transactions. At the time it said 18 stores had been given a facelift in the past 12 months with more to come over the year.

Analyst Philip Dorgan retained a hold rating on the shares on the basis that the company was well-placed to benefit from an upturn in the housing market - which has been boosted by a series of Government initiatives. However, N+1 Singer remained cautious amid volatile consumer confidence and concern that Topps faces increased competition from DIY retailers such as B&Q.

Source : Express & Star
www.expressandstar.com/business/city-news/2013/05/25/poor-kingfisher-figures-expected/

26 May 2013
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