The owners of the B&Q and Homebase DIY chains have revealed differing fortunes in their latest results announcements.
B&Q owner Kingfisher reported the company’s sales down 0.9% in the year ending in January at £3.8bn. But profits grew by 10.9% to £238m, with gross margins 30 points ahead thanks to sales of higher margin products and more direct sourcing.
During the period Kingfisher bought 31 former Focus DIY stores, opening 27 under the B&Q banner after a capital cost of £15m. Group chief executive Ian Cheshire said these were now trading well.
Mr Cheshire said that the immediate economic outlook remained uncertain, but that Kingfisher’s “delivering value” programme would ensure it continued to trade strongly.
Fellow Kingfisher group member Screwfix saw sales rise 8.2% to £519m in the year, with profits 16.2% ahead at £33m.
Meanwhile, Homebase and Argos owner the Home Retail Group urged government to improve the retail climate by using the tax system to boost the incomes of lower and middle earners after reporting further falls in sales at both businesses in the three months to the end of February.
Homebase sales in the 52 weeks to February 25 fell 2% to £1.5bn, with the figures showing a worsening of trading in the last quarter, which was down 6.5% on 2010. Chief executive Terry Duddy said furniture, kitchen and bathroom business was particularly tough. He forecast some improvement later in the year, with sales possibly boosted by the Olympics and Queen’s jubilee celebrations, but Home Retail’s full year profit is forecast at £100m, compared to £254m last year.
Mr Duddy said the company’s outlook was cautious.
