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Kingfisher beats view as Q1 net rises 40%

KINGFISHER Plc, Europe's biggest home improvement retailer, beat forecasts with a 40 percent jump in first-quarter profit as its B&Q stores in Britain benefited from warm weather and steps to boost profit margins.

The firm, which also runs market leader Castorama in France, said yesterday that it made a retail profit of 128 million pounds (US$210 million) in the 13 weeks ended May 2, smashing analysts' average forecast of 94 million pounds in a company poll.

Sales at stores open at least a year fell 1.7 percent and the group said it was planning for tough trading conditions for the rest of its financial year as the weather-related surge in demand at B&Q was unlikely to be repeated.

But Kingfisher, which runs 833 stores in eight countries, also said B&Q was making good progress with its turnaround plan after struggling with a weak housing market.

Like-for-like sales at B&Q rose 3.2 percent, the first increase in two years, with gross profit margins up 80 basis points thanks to fewer markdowns and supply chain improvements.

Sales of outdoor products leapt 30 percent, almost reversing a plunge in the same period last year when Spring weather was poor.

Like-for-like sales fell 2.8 percent in France and were down 6.3 percent in other international markets, where a big fall in China was cushioned by a flat performance in Poland.

Kingfisher shares fell as much as two-thirds in value in 2007-08 as Britain's housing market slumped, but have bounced back recently on hopes for an economic recovery and a series of measures such as cost-cutting and store revamps.


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