Kingfisher raises dividend on 50% profit surge
Fortunes at Kingfisher, the owner of B&Q, appear to be turning after the company reported pre-tax profits of £547 million, a rise of nearly 50 per cent, and increased its dividend for the first time in five years.
Kingfisher, which is the largest DIY company in Europe and the third largest in the world, said that it had been buoyed by improvements to its internal operations and a new executive team, and plans to nearly double its capital expenditure to £400 million.
Sales across the group rose £10 billion to £10.5 billion for the 12 months to January 30, though like-for-like revenue, which strips out turnover from new stores opened during the year, fell by 1.5 per cent.
UK sales rose by 1.4 per cent, taking total sales for the year to £4.4 billion, although there was a 65 per cent rise in retail profit owing to “margin and cost initiatives”.
The group said that it had halved losses in its struggling China operation.
The “green pound” was a notable factor in profits as sales of eco-products totalled more than £1 billion for the first time.
Kingfisher announced that it would be increasing its final dividend by 5 per cent to 3.575p but warned that it remained “cautious” on the outlook for consumer demand.
Ian Cheshire, the group chief executive, said: “Profitability, cash generation and return on capital all grew in the UK and Ireland, France, Poland Turkey and Spain. Encouragingly, losses were significantly reduced in China as our turnaround plan progresses.”
“In generally weak consumer markets our self-help initiatives underpinned our robust performance, driving a higher gross margin, more cost efficiency and lower working capital.”
Kingfisher said that it was continuing with plans to broaden its product range and to expand further in France and Eastern Europe, with 15 new stores planned for Poland, Turkey and Russia. About 60 per cent of its business is overseas.
Kingfisher said that it had managed to reduce its net debt by three quarters and that it had a free cashflow of £761 million.
Source : The Times.
