Wet Weather To Blame For 7% B&Q Profit Plunge

B&Q owner Kingfisher has said the wettest summer in 100 years cost the group £30m in profit as demand for gardening and outdoor maintenance plunged.

The FTSE 100 Index company, which also owns tools supplier Screwfix as well as Castorama and Brico Depot in France, said record rainfall in the UK and northern Europe helped prompt a 7% drop in seasonal product sales in the 26 weeks to July 28.

B&Q in the UK and Ireland suffered a 6% like-for-like decline in sales to £2bn as average footfall plunged 20% in the severely weather-affected weeks.

The wider group reported a 17% slide in bottom line pre-tax profits to £364m in the period as sales dipped 3% to £5.5bn.

Chief executive Ian Cheshire said: "This has been a tough first half with unprecedented wet weather throughout the key spring and summer seasons in northern Europe.

"This affected footfall and demand for outdoor maintenance, gardening and leisure products, which normally account for a significant proportion of our first half sales."

More than 14.25in of rain fell in June, July and August, making it the wettest summer since 1912.

The group said the cost of accelerating its national roll-out of new common own brands in the UK cost around £10m in the period, while it also took an exceptional charge of £5m, relating to streamlining support offices.

Kingfisher group's retail profit in the UK and Ireland declined by 20% to £145m, reflecting weak seasonal sales and additional markdowns to clear seasonal stocks.

At B&Q, sales of building products were hit by the adverse weather, while sales of indoor decorative products were up as customers switched some of their home improvement activities indoors.

The B&Q chain saw retail profit slide 24% to £125m.

Screwfix grew total sales by 9% to £273m and that chain opened 25 new outlets in the first half, taking the total to 240, with retail profit jumping 19% to £20m.

Manchester Business School retail analyst Tarlok Teji said: "Although the results are in line with expectations given the poor weather and major Olympics distractions from DIY, B&Q hasn’t made good on the demise of Focus in the UK last year, which I would have expected.

"The company also hasn’t found a solution to solve the depressed housing market, which will be a pressing concern long after the problems of wet weather and the Olympics have passed."