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The week ahead: Kingfisher to report on trading

B&Q parent Kingfisher is set to reveal a weather boost to trading figures on Thursday after the hot summer and unseasonably mild autumn spurred on sales of home improvement and garden products.

The group saw sales of outdoor goods at DIY chain B&Q surge 17% in the second quarter after the heatwave sent demand for hosepipes and barbecues soaring along with the temperature.

It is expected to been helped further in the third quarter thanks to the hot August Bank holiday and warm autumn, which compared with colder temperatures a year earlier.

Analysts at Bernstein are predicting a 2% rise in UK and Ireland same store sales, also including the group’s the Screwfix chain, down only slightly on the 2.5% lift seen in the third quarter.

But Deutsche Bank is expecting much of the third quarter sales rise to come from Kingfisher’s Screwfix arm as it benefits from a pick up in the trade market.

It is forecasting a more muted 1% rise at B&Q, although this would still be a marked turnaround on the 4% plunge seen a year earlier.

While the market will be keen for any signs of a boost from the recent housing market revival, Deutsche Bank experts believe B&Q will have to wait until next year before it feels the benefit.

They said: “UK house moves should rise by around 15% in 2013 to the highest level since 2007, but are still 25% below historic averages.

“Help to Buy launched during the third quarter, hence a major sales recovery at B&Q is unlikely until 2014/15.”

Trading profits across the group are likely to see an impressive rise, by as much as 12.6% to £289m in the third quarter, according to Bernstein’s team, thanks to a favourable currency movements and a decent performance across its international operations.

Source : EADT 24

25 November 2013
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