Screwfix boosts Kingfisher's profits

Kingfisher, the B&Q and Screwfix owner, has reported sharply higher profits, boosted by resilient sales in the UK and a weaker pound.

Pre-tax profits rose 48% to £759m for the year to 31 January, from £512m.

However, chief executive Veronique Laury warned of future uncertainty caused by Brexit and the French presidential elections.

The cautious outlook sent Kingfisher shares down almost 5%, making it the biggest faller on the FTSE 100.

The DIY retailer also trades as Castorama and Brico Depot in France, where sales were much weaker.

Despite the rise in profits, Ms Laury warned: "Looking forward, the EU referendum has created uncertainty for the UK economic outlook and we remain cautious on the outlook for France, especially in light of the forthcoming presidential elections."

Under her management, the retailer is undergoing a five-year restructuring programme designed to close unprofitable shops, improve technology and unify products.

The group said it had finished its B&Q store closure programme, which has seen it shut 65 shops and cut about 3,000 jobs in the UK and Ireland.

UK like-for-like sales rose 5.9% following strong demand at Screwfix.

Total B&Q sales fell 3.3% after its store closure programme.

Total adjusted sales rose 8.7% to £11bn.

It opened 60 new Screwfix outlets over the year, expanding its chain to 517, with plans for future expansion.

On the international front, Poland provided buoyant like-for-like sales that increased by 5.1% thanks to a better product range.

A weaker pound also boosted its overseas profits by £52m.

Neil Wilson, senior market analyst at ETX Capital said: "Solid enough results for Kingfisher, with a good performance from Screwfix, but evidence of a slight slowdown in the second half of the year might be cause for concern, while a lot of the gains seem to be down to the weak pound.

"Profits beat estimates, but investors are showing signs of concern."

He said Screwfix was the "standout performer", demonstrating the resilience of the UK economy following the EU referendum last June.

He said this suggested Britain's plumbers, electricians and other trades were busy building, despite Ms Laury's concerns about Brexit.

Sales at Screwfix rose 23.2%, or 13.8% on a like-for-like basis, driven by its specialist trade desks which are exclusive to plumbers and electricians.

He warned the worry was the slowdown in the second half of the year, which may reflect some pullback in UK consumer spending, in addition to seasonal factors.

It has also announced Andy Cosslett is to take over as chairman, replacing Daniel Bernard, who is retiring after eight years in the job.

Mr Bernard welcomed his replacement in a statement.

"He is a very experienced board director with strong branding and consumer credentials gained at companies such as Unilever, Cadbury Schweppes and InterContinental Hotels.

"As we are now at the end of the first year of our exciting five-year transformation plan, I believe it is the right time for a new chairman to oversee its full delivery and Andy is uniquely placed to do this."