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The week ahead: Kingfisher reports on trading

The impact of favourable weather conditions on Kingfisher’s B&Q business will be offset by poor trading in France and a strong pound, when it issues a trading update on Tuesday.

Analysts at Numis believe the Screwfix owner will unveil a 3.9% fall in trading profit to £245m as the group is impacted by the softer trading at French unit Castorama and at outlets in Poland.

Europe’s leading home improvement group has been affected by the slowing economy and housing market in France, although in the UK and Ireland conditions have been more helpful as like-for-like sales rose 4.4% in half-year results in September.

Britain’s Indian summer will have benefited B&Q while Screwfix is expected to continue its run of double-digit growth in underlying sales.

A stronger pound against the euro and Polish zloty, which together account for two-thirds of the groups trading profit, have continued to weigh on trading.

The results come as Kingfisher boss Sir Ian Cheshire prepares to stand down in January from the firm he has led for seven years.

He will be replaced by the group’s Castorama boss Veronique Laury, who will run the firm’s 1,157 stores across 10 countries in Europe and Asia and become one of the few women to lead a FTSE 100 firm.

Investors will also want to know what plans Kingfisher has for its large estate in light of last month’s decision by rival Home Retail to close a quarter of its 323-store Homebase DIY chain over four years due to falling sales.

Source : Roger Baird - EADT 24

24 November 2014

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