Hopes for a turnaround in the UK DIY market were scotched today after Kingfisher reported another drop in profits at its B&Q home improvement stores.
Shares in the group dipped 2 per cent to 243.5p after brokers hoping for signs of a recovery expressed disappointment in Kingfisher’s third-quarter trading update.
However, due to a stronger performance in its European business, Kingfisher reported a better than expected overall trading profit.
Total group sales rose 8.5 per cent, with retail profit up 10.5 per cent at £173 million.
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At B&Q, which owns 324 home renovation and DIY stores across Britain, like-for-like sales fell 1.1 per cent in the 13 weeks to October 28.
Profits at the chain were £46.6 million, down from £50.3 million over the same period last year.
Analysts had been hoping for a turnaround this quarter, after two years of consecutive falls in profits.
Gerry Murphy, the group chief executive, said the UK home improvement market ‘’continues to be weak and price sensitive”.
He later told a conference call the market was ‘’stablilising’’.
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His comments followed those from Terry Duddy of Home Retail Group last week, who said DIY market prospects were not improving in the short term.
In France, Kingfisher took a higher market share, reporting 1.5 per cent like-for-like sales growth ‘’’despite continuing competitive pressue”.
Profits were flat at £77 million.
Improved sales were reported in Castorama stores across the rest of Europe.
The group also reported that renovations to eight B&Q sites were ‘’well underway’’, with around 25 more scheduled to commence next year, after three upgrades were completed earlier this year.
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Richard Hunter, head of equities at Hargreaves Lansdown, the stockbroker, said Kingfisher shares were ‘’a hold - at best’’, except if takeover speculation arose.
‘’The flagship B&Q operation continues to suffer at the hands of consumer apathy, with rising household bills and, latterly, higher interest rates claiming a greater share of household income,’’ Mr Hunter said.
He added: The company has geographical diversification which at least gives some hedge to this malaise in the UK.’’
While there was ‘’some light at the end of the tunnel ... recovery seems a long way off,’’ he said.