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International growth offsets weak UK market for Kingfisher

B&Q and Castorama owner Kingfisher reported total Q4 sales slightly down 0.1% at 2.3bn, up 2% in constant currencies. Kingfisher said it expects full-year pretax profit to be towards the top end of estimates.

The group said it expects adjusted full year pre-tax profit to be up over 20% on the prior year and towards the top end of the range of current analyst estimates. Total sales in France were 896 million, up 3.0%, (+2.0% LFL). Castorama total sales increased by 5.7% to 482 million (+4.7% LFL, +5.1% on a comparable store basis). Brico Dpt delivered flat sales of 414 million (-1.0% LFL) with customer traffic to out of town stores more impacted by the adverse weather in northern France. Gross margins across the French businesses are expected to be slightly up compared with Q4 last year.

Total sales in the UK & Ireland were 954 million, up 0.7%, (flat LFL). B&Q total sales increased by 0.1% to 835 million (-0.3% LFL) reflecting adverse weather in December which temporarily disrupted the delivery and installation of kitchens, and a weak market in the UK & Ireland. Gross margins are expected to be slightly up despite strong comparatives (2009/10: +330 basis points) supported by more direct sourcing and further shrinkage reduction. Screwfix total sales grew 5.4% to 119 million (+2.6% LFL) boosted by new ranges, the continued roll out of trade counters and the addition of specialist trade desks, exclusive to plumbers and electricians, within existing Screwfix outlets.

Total sales in the Other International division were 455 million, up 2.6%, (-1.1% LFL). In Eastern Europe total sales in Poland increased by 7.1% to 238 million, up 3.3% LFL, benefitting from easier comparatives (2009/10: -4.7%) and a more stable market. Total sales in Russia grew 42.5% to 64 million mainly reflecting new store openings and in Spain by 12.1% to 47 million. In China total sales declined by 21.5% to 106 million (-16.2% LFL) reflecting two less stores compared with Q4 last year and difficult comparatives (2009/10: +29.2% LFL). In Q4, traditionally the strongest trading quarter of the financial year, China delivered a profit, with the turnaround plan remaining on track. Ian Cheshire, Group CEO, said: "We have ended another challenging year in robust shape. Our programme of self-help initiatives has continued to deliver profit growth and higher returns whilst strengthening the business for the future.

"Our international businesses delivered strong growth in the final quarter, more than offsetting some weather disruption and a weak market in the UK & Ireland, and so we expect to announce full year profits towards the top end of the range of analyst estimates. "Looking ahead we will continue with self-help activity in 2011 as we complete our successful Delivering Value plan and start to mobilise the next phase of our development."

Preliminary results for the year ended 29th January 2011 will be announced on 24th March 2011.

Source :

17 February 2011
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