Kingfisher blames H1 profit dip on weather and consumer confidence

Home improvement retailer Kingfisher, owner of B&Q and Screwfix, blamed depressed consumer confidence and cold weather for reduced profits in the first half of the year. Although sales grew 4.3% to £5.7bn, which was helped by currency changes, profit before tax and exceptional items fell 1.6% to £365m.Chief Executive Ian Cheshire said after enduring a difficult first quarter where sales and profits were affected by record bad weather in Europe, the group was able to capitalise on the better weather in the second quarter to deliver a broadly flat result across the half.On the upside, the company received a £145m tax credit from the French authorities after winning an appeal. He added: "However, underlying consumer confidence remains weak in our major markets, so we continue to focus hard on our self-help initiatives to drive growth, margin and cost efficiencies." Segmenting revenues geographically, France saw a 2.4% fall in like-for-like sales and flat profits; UK & Ireland a 1% decline in like-for-likes and 1.4% decline in profits; while the Other International segment grew like-for-likes 2.9% mainly from Russia and China but saw a 7.3% drop-off in profits mainly from weather-ravaged Germany and Poland.Kingfisher opened 29 net new stores across France, UK, Poland, Spain and Turkey, representing 1.4% space growth, and acquired 15 'Bricostores' in Romania, adding 3% space to the group.A 'rightsizing' project of UK B&Q stores has begun which will eventually reduce space by 5% in order to slash £130m from lease-adjusted debt and save an annual £23m in rent and rates. The board recommended a 1% increase in the interim dividend to 3.12p."Looking ahead, we remain ready to capitalise on any improvement in conditions or opportunities as they arise, including the potential pick up in the UK housing market," Cheshire concluded."Overall, we remain confident in our future prospects."OH