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DIY BUILDS A 35% PROFITS RISE FOR KINGFISHER

Kingfisher's Ian Cheshire is 'cautious'

Friday September 18,2009

By David Craik

A REDISCOVERY of the “enjoyment” of DIY during the recession has boosted sales at B&Q owner Kingfisher.

Chief executive Ian Cheshire said the group, which also owns Castorama in France, had benefited from “DIY becoming cool again” as it posted a 35 per cent rise in first-half pre-tax profits to £288 million on sales up 7 per cent to £5.5 billion.

B&Q was the “jewel in the crown” with a 66 per cent profit rise to £137 million on sales up 2.6 per cent to £2.2 billion.

“Because of the housing downturn, people are looking to undertake home improvements rather than move,” Cheshire said. “They are shifting back to DIY because it is cheaper and because they enjoy doing it.”

Sales of paint and designer wallpaper had done particularly well: “People used to use bland paint colours because they were looking to sell. But now they are buying funkier colours. They are investing in more of an expression of themselves in their homes. They are spending more time at home and they see it as a place to live in, not just a financial asset.”

Kitchen, bathroom and bedroom sales grew 4 per cent, helped by new ranges and the collapse of competitors such as MFI.

“We have also benefited from more wealthier and older customers trading down,” Cheshire said. “They used to buy their kitchens from independents but now they are buying from us.”

The recession was also seeing more people grow their own vegetables, he said. The company recorded a 19 per cent rise in vegetable seed sales and the “first spring in three years” had boosted sales of patio furniture.

Cheshire said Kingfisher’s results were “as close as you can get to retail happiness”. But sales at Screwfix, Kingfisher’s trade business, were down 6 per cent to £236 million as the building trade continued to suffer. He remained “cautious” on consumer spending, saying: “If people begin to feel secure in their jobs they will begin to take the brakes off their spending. We are watching it but not counting on it.”