British multinational retailing company Kingfisher plc recorded 16% slump in adjusted pre-tax profit to £371 million in six months to the end of July. London-based retailer blamed the European debt crisis and torrential rain in the UK for the drop in the sales.
Owner of the B&Q and Castorama chains said today in a statement that the wet weather across in the UK and northern Europe deterred spending, resulting in a 7% drop in seasonal product sales. Kingfisher estimated the total sales dropped by 3.3% to £5.48 billion.
B&Q in the UK and Ireland were worst affected by wet weather as they recorded 6% drop in like-for-like sales to £2 billion. Customer visits to the stores were down by 20% in the wettest weeks across the UK and Ireland.
The sales drop relayed in France, where Kingfisher has Castorama and Brico Dépôt. Sales in France were down by 5.6% to £2,206 million from £2,341 million last year. In France, the British group also recorded slump in retail profit by 4.9% to £191 million from £201 million at the halfway point last year.
The only bright spot for the Kingfisher was Russia, where company reported 48% rise in profits. In Russia, sales were up 19.3% on a like-for-like sales basis.
Commenting on the financial report of H1, 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.”
In spite of the drop in profit, Kingfisher raised its interim dividend 25.1% to 3.09 pence. Although the fall in profit affected trading as Kingfisher fell 3.3% to 272.3 pence in London trading yesterday, paring the stock gain this year to 8.6%.