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Pin to quick picksKingfisher Share News (KGF)

Share Price Information for Kingfisher (KGF)

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Share Price: 251.30
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Change: 3.10 (1.25%)
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UPDATE 2-Kingfisher downbeat on France's 2014 prospects

Thu, 28th Nov 2013 11:06

* Q3 retail profit 271 mln pounds vs f'cast 280 mln

* Sales up 8 percent to 2.92 billion pounds

* Like-for-like sales up 1.4 pct

* France retail profit down 5.6 pct, UK up 8.3 pct

* Shares fall up to 6.6 pct

By James Davey

LONDON, Nov 28 (Reuters) - Kingfisher, Europe'sbiggest home improvement retailer, highlighted contrastinggrowth prospects for 2014 in Britain and France as it postedthird-quarter profit at the lower end of forecasts, blaming atough French market.

Shares in the group, which trades from 1,082 stores in ninecountries in Europe and Asia, fell up to 6.6 percent on Thursdayafter it said there were no obvious signs in France of animminent improvement in consumer confidence.

France, where Kingfisher trades as Castorama and BricoDepot, is the group's most profitable market.

Chief Executive Ian Cheshire said there was a stark contrastbetween the outlook for Britain and for France, pointing to UKunemployment of 7.6 percent as opposed to over 11 percent inFrance and a UK housing market that is growing as opposed to aFrench housing market that is declining.

"You've got belief (in Britain) that things will be betternext year which is not the case in France," he told reporters.

Analysts at Cantor Fitzgerald cut their 2013-14 pretaxprofit forecast to 745 million pounds ($1.21 billion) from 755million pounds and their forecast for the following year by asimilar amount, saying they saw limited upside to both earningsand margins in France.

Kingfisher, which also runs the B&Q and Screwfix chains inBritain, made a retail profit of 271 million pounds ($441million) in the 13 weeks to Nov. 2 - an increase of 1.7 percenton a constant-currency basis.

That compared with analyst forecasts in a range of 271 to285 million pounds, with a consensus of 280 million.

Total sales rose 8 percent to 2.92 billion pounds, withsales at stores open over a year up 1.4 percent.

In France like-for-like sales were flat and retail profitfell 5.6 percent, impacted by a slightly lower gross marginpercentage in a more price-promotional environment.

Like-for-like sales in the UK & Ireland increased 2.0percent, while retail profit was up 8.3 percent, driven bygrowing demand at the construction end of the home improvementmarket, assisted by government initiatives to stimulateBritain's housing market.

B&Q and Screwfix also got a boost to trade after a severestorm hit Britain in October, with sales of fence panels up 41percent year-on-year in the week after the storm.

Kingfisher saw sales growth in each of its otherinternational markets, including Poland, Germany and China.

The group is Europe's biggest home improvement retailer interms of sales and No.3 in the world behind U.S. groups Lowe's and Home Depot.

It has offset weak demand in many of its markets with a"self help" drive to improve profitability by buying more goodscentrally, and directly, from places like China.

"Looking ahead, we remain ready to capitalise on anyimprovement in conditions or opportunities as they arise," saidCheshire, adding he remained "enthusiastic about our longer-termprospects."

Shares in Kingfisher, up 39 percent this year beforeThursday's update, were down 21 pence at 374.5 pence at 1103GMT, valuing the business at 8.9 billion pounds.

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