Kingfisher DIY group hit by 'soft' French market
DIY retailer Kingfisher has reported a drop in third-quarter profits after being hit by a "soft" market in France and by adverse currency movements.
Kingfisher, which owns B&Q and Screwfix in the UK and Castorama and Brico Depot in France, said retail profits for the quarter fell 6.6% to £223m.
Underlying UK and Ireland sales were up 4.6%, but rose just 0.1% in France.
Currency swings, including the weakening of the euro against the pound, took £17m off profits.
"Q3 trading conditions have followed a similar trend to the first half of the year, reflecting the more encouraging macroeconomic backdrop in the UK offset by a softer market in France," said chief executive Veronique Laury.
Earlier this year, Kingfisher said it would close 60 B&Q stores. However, it is increasing the number of Screwfix stores, where sales have been growing much faster.
Like-for-like sales at B&Q were up 2.4% in the three months to the end of October, while Screwfix sales jumped 13.3%.
However, the weaker housing market in France affected sales there. Castorama sales slipped 0.2% on a like-for-like basis, although they rose 0.4% at Brico Depot.
"Today's update from Kingfisher highlights a typically mixed bag of results," said David Alexander, consultant at retail analysts Conlumino.
"While it is making progress in the UK, amid an improving consumer context, sales in France were disappointing, with the group drawing attention to the slow growth of house building across the Channel as a key factor underpinning its lacklustre performance."
He said it was still "early days" for Ms Laury's new strategy for Kingfisher, but added: "Given the difficulties B&Q continues to face in adapting to the new shape of DIY demand and the unfavourable economic climate in France, progress so far has been acceptable."