Poor performance in France has been blamed for a slump in profits for the owner of DIY chains B&Q and Screwfix.
In its latest trading update, Kingfisher plc reported a 11.8 per cent drop in profits to £225 million while total sales were also down 3.6 per cent in the 13 weeks to November 1st. One of the driving forces behind the figures was the stuttering performance of its French market. Kingfishers operates brands such as Brico Depot and Castorama in France making the country a major influence on its results.
The company noted that France was currently in the midst of an ongoing weak market and had also resulted in retail profit falling. Total sales in France dropped by 9.3 per cent and Kingfisher was not helped by a lower gross margin percentage in a more "price promotional environment". Alongside issues in France, Kingfisher was also hit by adverse foreign currency moves in the third quarter.
Commenting on the figures, Sir Ian Cheshire, Kingfisher group chief executive, who will be replaced by Castorama France chief executive Veronique Laury in December, said: "Trading conditions in our largest and most significant market, France, were particularly difficult and deteriorated across the quarter, impacted by the weak economic backdrop. In the UK however, where conditions have been more favourable."
Performance in the UK has been the bright spot in the company's figures. Profits in both the UK and Ireland were up by 4.8 per cent, aided by the strong performance of Screwfix. The chain had seen like-for-like sales grow by 13.1 per cent during the last quarter, one of the highlights of the company's trading update.
Kingfisher's disappointing financial results impacted on the company's share price. The firm opened 3.42 per cent down at 09:26 GMT on Tuesday (November 25th), sitting at 293.60.
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