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The week ahead - Kingfisher

B&Q parent company Kingfisher has already set the scene for decent results on Thursday, but the market will also be keen for an update on the final year of a strategy overhaul.

The group said last month it expected a 20% rise in annual profits after strong international growth offset continued tough trading in the UK.

It guided towards adjusted pre-tax profits at the top end of City expectations, which ranged from £661m to £672m, after strong sales in countries such as Poland and Russia.

The City has since moved its forecasts up to £668m for the year to the end of January, which compares with £547m the previous year.

Its last update showed improvement at its UK and Ireland division despite the snow disruption, with like-for-like sales at B&Q declining 0.3% in the 13 weeks to January 29 – far better than the 5.1% seen in the previous quarter when comparisons with a year earlier were tougher.

The snow in December delayed the installation of kitchens, but prompted a 43% hike in winter fuel sales and an 11% rise in demand for portable heaters.

Its building supplies arm Screwfix also performed well, with sales up 5.4% to £119m after it introduced new ranges.

However, the focus is likely to shift to its ongoing “delivering value” programme.

Analysts at Royal Bank of Scotland said: “Trade Points in large B&Q stores, refreshed ranges overseas, lower costs of operating and an ongoing focus on driving gross margin gains through direct and common sourcing should insulate the business from a challenging UK environment, wages and underlying cost inflation.”.

Source : Herald Scotland

21 March 2011
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