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LONDON (Alliance News) - Home improvement retailer Kingfisher PLC Thursday reported higher revenues and retail profits for the third quarter, driven by a strong performance from its Screwfix business in the UK and in its international stores outside France, which remained a drag.
The owner of brands including B&Q, Screwfix, Castorama and Brico Depot, said sales rose 8% in the 13 weeks to November 2 while retail profit was up 5.8%. At constant currency rates, sales rose 4.6% and retail profits 1.7%.
In the UK, the company reported a 3.8% rise in sales and 7.9% growth in retail profits, or 8.3% at constant currencies, as it opened its 300th Screwfix store during the quarter. Internationally, sales were up 11.6% at constant currencies and retail profit rose 13.6%, driven by margin improvements in Poland and a bigger contribution from Hornbach in Germany.
It said it is still experiencing weak consumer confidence in France, but managed to increase sales 1.9% at constant currencies. However, sales were flat on a like-for-like basis and retail profit fell 5.6% at constant currencies as higher use of promotions hit the margin.
"Whilst we have delivered sales growth in each of our geographies our markets remain challenging, especially in France where consumer confidence is still weak and with no obvious signs of an imminent improvement," Chief Executive Ian Cheshire said in a statement.
Screwfix has become the company's main driver. Total sales at the business grew 21.1% in the quarter to GBP180 million, and were up 11.1% on a like-for-like basis. The company cited a strong promotional programme, extended opening hours, the rollout of new stores, and the introduction of click & collect.
In China, sales were up 12.5% to GBP112 million, or 13.2% on a like-for-like basis. Still its retail loss in the country widened to GBP4 million as it spent GBP1 million testing a new store format. It also warned that industrial action had disrupted trading in its decoration centres during the key "Golden Week" holidays, hurting sales in the third quarter and into the fourth quarter.
Kingfisher shares were down 4.2% at 379.2 pence early Thursday, the biggest decline on the FTSE 100.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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