B&Q owner Kingfisher has warned of “very tough times ahead” as consumers come under pressure from rising bills and a slowing economy, despite reporting forecast-beating first-half profits. The retail group has posted pre-tax profits of £214m for the first half of the year, up 23% on the same period last year.
The company attributes its strong performance on more own-branded products being available. It says its focus will now shift towards improving in-store service and expanding the three UK brands – B&Q, Trade Depot and Screwfix.
Its better-than-expected performance comes on the heels of rival Home Retail Group, owner of Argos and Homebase, which last week announced heavy sales falls for the second quarter. Analysts believe that the book value of Homebase could be cut from £1bn to between £100m and £300m.
Kingfisher has seen sales increase across Europe and Asia between February and Asia this year, and have also profited from its decision to sell Castorama Italy for €560m (£445m).
Group chief executive Ian Cheshire says: “We have delivered a solid set of results in a difficult period for consumers. We have grown sales and our profits have benefited from actions to improve margin and manage costs.
“We continue to anticipate very tough times ahead, especially in the UK, but remain focused on providing the best choice and value to our customers whilst managing our costs and working capital tightly.”
Over half of Kingfisher’s sales and around two thirds of profits are earned
in the Group’s international markets outside the UK, where further expansion is also being planned.