B&Q owner sees strong UK growth but five Ulster stores still to close
The owner of B&Q and Screwfix has revealed strong UK trading thanks to a pick-up in house building - but it saw group results weighed down by tough conditions in France.
Kingfisher said like-for-like sales growth picked up pace for its DIY chain B&Q in the UK and Ireland, rising by 2.4% in the quarter to October 31 thanks to strong sales of outdoor seasonal goods and building products.
The firm is benefiting from a pick-up in housebuilding in Northern Ireland, with a 40% increase in new homes to 994 registered in the third quarter of this year, up from 2014. But industry bodies have said housebuilding rates here are 50% below requirements.
Kingfisher is still set to press ahead with a programme of B&Q store closures. The company confirmed in September that it will shut five of its nine Northern Ireland stores - Boucher Road in Belfast and Buncrana Road in Londonderry have been earmarked for closure, while Craigavon, Sprucefield and Ballymena are expected to follow suit.
However, stores in Coleraine, Belfast's Holywood Exchange, Newtownabbbey and Newry are remaining open.
In its latest quarterly results, the trade-focused Screwfix arm was once again the star performer, with same store sales up 13.3% as it continued to benefit from growth in housebuilding and as more homeowners shy away from DIY and turn to tradesmen to do work for them.
There are seven Screwfix stores in Northern Ireland.
The growth in sales at Screwfix pushed UK and Ireland retail profits 14.2% higher to £80m in the third quarter.
But trading continued to suffer in France, where it trades as Castorama and Brico Depot, with sales edging just 0.1% higher in the three months as it battles against ongoing weak consumer confidence and a declining housing and construction market.
The weakness of the euro against the pound compounded the woes in France, with retail profits diving by 15.7% to £109m.
Overall, a £17m currency hit left group-wide retail profits down 6.6% to £223m.
Even with the currency impact stripped out, Kingfisher said retail profits lifted marginally, by 0.4%.
Chief executive Veronique Laury, who took over from Sir Ian Cheshire last December, insisted the group was making good progress with an overhaul.
She added: "We have secured a further five agreements on the B&Q stores already planned for closure, taking the total to 31."
In March, Laury announced the closure of as many as 60 B&Q stores over the next two years, affecting around 3,000 jobs in the UK and Ireland.
Other plans include cutting back on some of the 393,000 products sold across the company, particularly as only 7,000 items - amounting to 7% of sales - are sold in at least two of Kingfisher's operating companies.
The group is also looking to make the most of its store space and is in discussions with several retailers about sub-letting.