Date: Thursday 31 May 2012
It was a case of 'rain stops pay' at do-it-yourself retailer Kingfisher in the company's first quarter.
Total sales in the 13 weeks to April 28th were down 3.6%, or 1.3% on a constant currency (CC) basis, from a year earlier at £2,632m, as poor weather across Europe affected footfall. Like-for-like (LFL) sales were down 4.8% on a CC basis.
The performance was slightly better than broker Jefferies had been expecting; the US broker had forecast first quarter sales would be down by almost 4% year-on-year, or down 2% on CC basis.
Retail profit fell 8.6%, or 5.5% on a CC basis, to £160m.
The UK & Ireland, as expected, let the side down a bit, with sales off 7.0% (CC: -6.9%) at £1,105m. LFL sales were down 10.4% for the B&Q owner, a better performance than the 11% decline predicted by Panmure Gordon. Retail profit in the UK & Ireland declined 9.8% to £75m.
In France, sales were down 1.8% at £1,089m but up 2.2% on a CC basis, and up 0.7% on a LFL basis. Again, this was a better showing than Panmure Gordon had been anticipating, the broker having forecast a LFL decline of around 1%. Retail profit in France was up 0.1% (CC:+4.2%).
The group said that sales and profit were affected by record adverse weather in the UK and across continental Europe, compounded by the comparison with a favourable first quarter this time last year.
Seasonal sales across the group were down 22%, denting profit by around £29m, but on-going gross margin and cost initiatives helped limit the first quarter overall profit decline.
"We anticipated the first quarter would be challenging, compared with last year's strong growth which was boosted by favourable spring weather and public holidays, but an extremely wet April this year in the UK and France compounded the difficulty, adversely impacting sales of outdoor and seasonal categories," said Ian Cheshire, Kingfisher's Group Chief Executive.
Net cash at the end of the reporting period was £165m, down from net cash of £283m a year earlier.
"With the first quarter typically one of the least significant of the year and with the key summer season still ahead of us, we remain confident that we are well prepared to capitalise on any improvement in conditions and deliver a solid full year result," Cheshire said.
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