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Overseas sales push B&Q to 20% jump in profits

B&Q owner Kingfisher has forecast a 20% rise in annual profits after strong international growth offset continued tough trading in the UK.

The group expects adjusted pre-tax profits for the year ending last month to be at the top end of City expectations, which range from £661m to £672m, after strong sales in countries such as Poland and Russia.

Analysts said the UK and Ireland division remained under pressure despite like-for-like sales at B&Q showing a decline of 0.3% in the 13 weeks to January 29, an improvement on the 5.1% seen in the previous quarter when comparisons with a year earlier were tougher.

Total sales at the UK stores were up 0.1% to £835m as the disruption from the snow in December delayed the installation of kitchens but prompted a 43% hike in winter fuel sales and an 11% rise in demand for portable heaters. Its building supplies arm Screwfix also put in a stronger performance, with sales up 5.4% to £119m after it introduced new ranges.

Chief executive Ian Cheshire was cautious about B&Q's outlook for the current financial year following the increase in VAT to 20% from 17.5% in January.

He said: "I'm expecting a difficult general market in the first six months with some improvement after that. It's more about trying to gain market share than expecting the market to be in recovery."

The rising cost of petrol was also a worry because it could make consumers less likely to drive to stores, he added.

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