UK: Washout summer hits profits at B&Q owner Kingfisher

B&Q owner Kingfisher said today that the wettest summer in 100 years had cost the group �30 million in profit as demand for gardening and outdoor maintenance products plunged.

The FTSE 100 company, which also owns tools supplier Screwfix as well as Castorama and Brico Depot in France, said record rainfall in the UK and northern Europe helped prompt a 7% drop in seasonal product sales in the 26 weeks to July 28.

B&Q in the UK and Ireland suffered a 6% like-for-like decline in sales to �2 billion as average footfall plunged 20% in the severely weather-affected weeks.

The wider group reported a 17% slide in bottom line pre-tax profits to �364 million in the period as sales dipped 3% to �5.5 billion.

Chief executive Ian Cheshire said: “This has been a tough first half with unprecedented wet weather throughout the key spring and summer seasons in northern Europe.

“This affected footfall and demand for outdoor maintenance, gardening and leisure products, which normally account for a significant proportion of our first half sales.”

MeteoGroup, the weather division of the Press Association, has said 14.25in (362mm) of rain fell in June, July and August, making it the wettest summer since 1912.

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The group said the cost of accelerating its national roll-out of new common own brands in the UK cost around �10million in the period, while it also took an exceptional charge of �5million, relating to streamlining support offices.

Kingfisher group retail profit in the UK and Ireland declined by 20% to �145million, reflecting weak seasonal sales and additional markdowns to clear seasonal stocks.

At B&Q, sales of building products were hit by the adverse weather, while sales of indoor decorative products were up as customers switched some of their home improvement activities indoors. The chain saw retail profit slide 24% to �125 million.

Screwfix grew total sales by 9% to �273million, driven by the continued rollout of new outlets and the recent introduction of a mobile “click, pay & collect” service.

The chain opened 25 new outlets in the first half, taking the total to 240, with retail profit jumping 19% to �20million.

In France, retail profit was down 5% at �191million, while sales fell 6% to �2.2 billion.

There was some cheer for investors as the group raised its interim dividend by 25% to 3.09p.

Matthew McEachran, retail sector analyst at Singer Capital, said the results were below expectations and downgrades to full-year forecasts were “inevitable”.