24th Jul 2014 08:17
LONDON (Alliance News) - Kingfisher PLC dropped to the bottom of the FTSE 100 in early trading Thursday after the company recorded a marginal rise in sales for the 10 weeks to July 12, 2014.
Kingfisher shares were trading 6.52% lower at 314.3 pence per share, the biggest blue chip decliner.
The home improvement retailer said in a pre-close update for the second quarter that total group sales rose 0.8% during the period.
Kingfisher said that trading the second quarter was "always expected to be more difficult," and cited a very strong second quarter performance last year and the weather boosted first quarter of this year.
It was disappointed by slower-than expected growth in its French and Polish markets in the second quarter, notably in June, said the company.
Kingfisher CEO Ian Cheshire said, "It is unclear whether this recent weakness is short term phasing in nature, though we will know more by our interims in September having then traded through our key summer months. In the meantime we are accelerating our self-help margin and cost initiatives to help support our second half performance."
The UK & Ireland business saw total sales rise 0.7%, down 1.3% on a like-for-like basis, up 7.0% for the year-to-date. B&Q sales dropped 2.5% as it was impacted by a strong performance the previous quarter and comparative quarter last year. Screwfix sales were 22.6% higher during the period with the business on track to have opened 12 new outlets during the quarter, taking the total to 356, said Kingfisher.
Total sales in France dropped 1.4% and 2.2% on a like-for-like basis but was up 1.1% year-to-date. Total sales in Poland were down 3.4%, 3.5% on a like-for-like basis and up 4.5% for the year-to-dear.
The company also confirmed that the binding agreement of its acquisition of home improvement retailer Mr Bricolage, will now proceed subject to anti-trust clearances.
Subsequently, a mandatory offer will be made to acquire the shares held by the minority shareholders at the agreed price per share of EUR15, said Kingfisher, in accordance with applicable law.
The remainder of the process is expected to be completed around the end of Kingfisher's 2014/15 financial year, it said.
"Adding a third, complementary strong business alongside Castorama and Brico Dépôt will provide us with an attractive growth opportunity in our most important market," said Cheshire.
By Alice Attwood; [email protected]; @AliceAtAlliance
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